Correlation Between CAVA Group, and Virgin Orbit

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Can any of the company-specific risk be diversified away by investing in both CAVA Group, and Virgin Orbit 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 CAVA Group, and Virgin Orbit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and Virgin Orbit Holdings, you can compare the effects of market volatilities on CAVA Group, and Virgin Orbit 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 CAVA Group, with a short position of Virgin Orbit. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and Virgin Orbit.

Diversification Opportunities for CAVA Group, and Virgin Orbit

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CAVA and Virgin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Virgin Orbit Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Orbit Holdings and CAVA Group, 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 CAVA Group, are associated (or correlated) with Virgin Orbit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Orbit Holdings has no effect on the direction of CAVA Group, i.e., CAVA Group, and Virgin Orbit go up and down completely randomly.

Pair Corralation between CAVA Group, and Virgin Orbit

If you would invest  4,956  in CAVA Group, on September 12, 2024 and sell it today you would earn a total of  7,783  from holding CAVA Group, or generate 157.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

CAVA Group,  vs.  Virgin Orbit Holdings

 Performance 
       Timeline  
CAVA Group, 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in CAVA Group, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CAVA Group, is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Virgin Orbit Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Virgin Orbit Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Virgin Orbit is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

CAVA Group, and Virgin Orbit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CAVA Group, and Virgin Orbit

The main advantage of trading using opposite CAVA Group, and Virgin Orbit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, Virgin Orbit 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 Virgin Orbit will offset losses from the drop in Virgin Orbit's long position.
The idea behind CAVA Group, and Virgin Orbit Holdings 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.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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