Correlation Between Rocket Lab and VirTra
Can any of the company-specific risk be diversified away by investing in both Rocket Lab and VirTra 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 Rocket Lab and VirTra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocket Lab USA and VirTra Inc, you can compare the effects of market volatilities on Rocket Lab and VirTra 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 Rocket Lab with a short position of VirTra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocket Lab and VirTra.
Diversification Opportunities for Rocket Lab and VirTra
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rocket and VirTra is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Lab USA and VirTra Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirTra Inc and Rocket Lab 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 Rocket Lab USA are associated (or correlated) with VirTra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VirTra Inc has no effect on the direction of Rocket Lab i.e., Rocket Lab and VirTra go up and down completely randomly.
Pair Corralation between Rocket Lab and VirTra
Given the investment horizon of 90 days Rocket Lab USA is expected to generate 0.9 times more return on investment than VirTra. However, Rocket Lab USA is 1.12 times less risky than VirTra. It trades about 0.1 of its potential returns per unit of risk. VirTra Inc is currently generating about 0.05 per unit of risk. If you would invest 403.00 in Rocket Lab USA on September 5, 2024 and sell it today you would earn a total of 1,898 from holding Rocket Lab USA or generate 470.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocket Lab USA vs. VirTra Inc
Performance |
| Timeline |
| Rocket Lab USA |
| VirTra Inc |
Rocket Lab and VirTra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocket Lab and VirTra
The main advantage of trading using opposite Rocket Lab and VirTra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocket Lab position performs unexpectedly, VirTra 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 VirTra will offset losses from the drop in VirTra's long position.| Rocket Lab vs. Lilium NV | Rocket Lab vs. Archer Aviation | Rocket Lab vs. Ehang Holdings | Rocket Lab vs. Vertical Aerospace |
| VirTra vs. Innovative Solutions and | VirTra vs. Park Electrochemical | VirTra vs. Ducommun Incorporated | VirTra vs. National Presto Industries |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |