Correlation Between Virgin Galactic and Atkore International

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Can any of the company-specific risk be diversified away by investing in both Virgin Galactic and Atkore International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Virgin Galactic and Atkore International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Galactic Holdings and Atkore International Group, you can compare the effects of market volatilities on Virgin Galactic and Atkore International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Virgin Galactic with a short position of Atkore International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Galactic and Atkore International.

Diversification Opportunities for Virgin Galactic and Atkore International

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Virgin and Atkore is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Galactic Holdings and Atkore International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atkore International and Virgin Galactic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Virgin Galactic Holdings are associated (or correlated) with Atkore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atkore International has no effect on the direction of Virgin Galactic i.e., Virgin Galactic and Atkore International go up and down completely randomly.

Pair Corralation between Virgin Galactic and Atkore International

Given the investment horizon of 90 days Virgin Galactic Holdings is expected to under-perform the Atkore International. In addition to that, Virgin Galactic is 2.5 times more volatile than Atkore International Group. It trades about -0.06 of its total potential returns per unit of risk. Atkore International Group is currently generating about 0.05 per unit of volatility. If you would invest  14,081  in Atkore International Group on December 29, 2023 and sell it today you would earn a total of  4,778  from holding Atkore International Group or generate 33.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.66%
ValuesDaily Returns

Virgin Galactic Holdings  vs.  Atkore International Group

 Performance 
       Timeline  
Virgin Galactic Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Virgin Galactic Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Atkore International 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Atkore International Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward-looking signals, Atkore International reported solid returns over the last few months and may actually be approaching a breakup point.

Virgin Galactic and Atkore International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Virgin Galactic and Atkore International

The main advantage of trading using opposite Virgin Galactic and Atkore International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Galactic position performs unexpectedly, Atkore International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Atkore International will offset losses from the drop in Atkore International's long position.
The idea behind Virgin Galactic Holdings and Atkore International Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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