Correlation Between Virgin Orbit and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Virgin Orbit and NYSE Composite 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 Orbit and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Orbit Holdings and NYSE Composite, you can compare the effects of market volatilities on Virgin Orbit and NYSE Composite 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 Orbit with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Orbit and NYSE Composite.
Diversification Opportunities for Virgin Orbit and NYSE Composite
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Virgin and NYSE is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Orbit Holdings and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Virgin Orbit 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 Orbit Holdings are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Virgin Orbit i.e., Virgin Orbit and NYSE Composite go up and down completely randomly.
Pair Corralation between Virgin Orbit and NYSE Composite
Given the investment horizon of 90 days Virgin Orbit Holdings is expected to under-perform the NYSE Composite. In addition to that, Virgin Orbit is 15.26 times more volatile than NYSE Composite. It trades about -0.05 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.04 per unit of volatility. If you would invest 1,525,982 in NYSE Composite on February 3, 2024 and sell it today you would earn a total of 243,923 from holding NYSE Composite or generate 15.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 55.15% |
Values | Daily Returns |
Virgin Orbit Holdings vs. NYSE Composite
Performance |
Timeline |
Virgin Orbit and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Virgin Orbit Holdings
Pair trading matchups for Virgin Orbit
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Virgin Orbit and NYSE Composite
The main advantage of trading using opposite Virgin Orbit and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Orbit position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Virgin Orbit vs. Rocket Lab USA | Virgin Orbit vs. The Boeing | Virgin Orbit vs. Astra Space | Virgin Orbit vs. Lockheed Martin |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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