Correlation Between PAX Global and VIRG NATL
Can any of the company-specific risk be diversified away by investing in both PAX Global and VIRG NATL 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 PAX Global and VIRG NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAX Global Technology and VIRG NATL BANKSH, you can compare the effects of market volatilities on PAX Global and VIRG NATL 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 PAX Global with a short position of VIRG NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAX Global and VIRG NATL.
Diversification Opportunities for PAX Global and VIRG NATL
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PAX and VIRG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding PAX Global Technology and VIRG NATL BANKSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRG NATL BANKSH and PAX Global 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 PAX Global Technology are associated (or correlated) with VIRG NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRG NATL BANKSH has no effect on the direction of PAX Global i.e., PAX Global and VIRG NATL go up and down completely randomly.
Pair Corralation between PAX Global and VIRG NATL
Assuming the 90 days horizon PAX Global Technology is expected to generate 2.36 times more return on investment than VIRG NATL. However, PAX Global is 2.36 times more volatile than VIRG NATL BANKSH. It trades about 0.07 of its potential returns per unit of risk. VIRG NATL BANKSH is currently generating about 0.03 per unit of risk. If you would invest 17.00 in PAX Global Technology on September 12, 2024 and sell it today you would earn a total of 45.00 from holding PAX Global Technology or generate 264.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PAX Global Technology vs. VIRG NATL BANKSH
Performance |
| Timeline |
| PAX Global Technology |
| VIRG NATL BANKSH |
PAX Global and VIRG NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAX Global and VIRG NATL
The main advantage of trading using opposite PAX Global and VIRG NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAX Global position performs unexpectedly, VIRG NATL 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 VIRG NATL will offset losses from the drop in VIRG NATL's long position.| PAX Global vs. Zoom Video Communications | PAX Global vs. COSTCO WHOLESALE CDR | PAX Global vs. AEON STORES | PAX Global vs. INTERSHOP Communications Aktiengesellschaft |
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 CEOs Directory module to screen CEOs from public companies around the world.
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