Correlation Between Redwire Corp and Virgin Galactic
Can any of the company-specific risk be diversified away by investing in both Redwire Corp and Virgin Galactic 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 Redwire Corp and Virgin Galactic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redwire Corp and Virgin Galactic Holdings, you can compare the effects of market volatilities on Redwire Corp and Virgin Galactic 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 Redwire Corp with a short position of Virgin Galactic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redwire Corp and Virgin Galactic.
Diversification Opportunities for Redwire Corp and Virgin Galactic
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Redwire and Virgin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Redwire Corp and Virgin Galactic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Galactic Holdings and Redwire Corp 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 Redwire Corp are associated (or correlated) with Virgin Galactic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Galactic Holdings has no effect on the direction of Redwire Corp i.e., Redwire Corp and Virgin Galactic go up and down completely randomly.
Pair Corralation between Redwire Corp and Virgin Galactic
Considering the 90-day investment horizon Redwire Corp is expected to generate 0.8 times more return on investment than Virgin Galactic. However, Redwire Corp is 1.25 times less risky than Virgin Galactic. It trades about 0.26 of its potential returns per unit of risk. Virgin Galactic Holdings is currently generating about 0.0 per unit of risk. If you would invest 877.00 in Redwire Corp on August 24, 2024 and sell it today you would earn a total of 291.00 from holding Redwire Corp or generate 33.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redwire Corp vs. Virgin Galactic Holdings
Performance |
| Timeline |
| Redwire Corp |
| Virgin Galactic Holdings |
Redwire Corp and Virgin Galactic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redwire Corp and Virgin Galactic
The main advantage of trading using opposite Redwire Corp and Virgin Galactic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redwire Corp position performs unexpectedly, Virgin Galactic 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 Galactic will offset losses from the drop in Virgin Galactic's long position.| Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
| Virgin Galactic vs. Planet Labs PBC | Virgin Galactic vs. Eve Holding | Virgin Galactic vs. Redwire Corp | Virgin Galactic vs. Lockheed Martin |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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