Correlation Between Virgin Group and Kenvue
Can any of the company-specific risk be diversified away by investing in both Virgin Group and Kenvue 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 Group and Kenvue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Group Acquisition and Kenvue Inc, you can compare the effects of market volatilities on Virgin Group and Kenvue 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 Group with a short position of Kenvue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Group and Kenvue.
Diversification Opportunities for Virgin Group and Kenvue
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virgin and Kenvue is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Group Acquisition and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc and Virgin 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 Virgin Group Acquisition are associated (or correlated) with Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of Virgin Group i.e., Virgin Group and Kenvue go up and down completely randomly.
Pair Corralation between Virgin Group and Kenvue
Given the investment horizon of 90 days Virgin Group Acquisition is expected to generate 3.37 times more return on investment than Kenvue. However, Virgin Group is 3.37 times more volatile than Kenvue Inc. It trades about 0.04 of its potential returns per unit of risk. Kenvue Inc is currently generating about 0.0 per unit of risk. If you would invest 130.00 in Virgin Group Acquisition on November 2, 2024 and sell it today you would earn a total of 9.00 from holding Virgin Group Acquisition or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Group Acquisition vs. Kenvue Inc
Performance |
| Timeline |
| Virgin Group Acquisition |
| Kenvue Inc |
Virgin Group and Kenvue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Group and Kenvue
The main advantage of trading using opposite Virgin Group and Kenvue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Group position performs unexpectedly, Kenvue 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 Kenvue will offset losses from the drop in Kenvue's long position.| Virgin Group vs. Mannatech Incorporated | Virgin Group vs. Edgewell Personal Care | Virgin Group vs. Inter Parfums | Virgin Group vs. Nu Skin Enterprises |
| Kenvue vs. Sun Country Airlines | Kenvue vs. Ryanair Holdings PLC | Kenvue vs. Lion One Metals | Kenvue vs. Lindblad Expeditions Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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