Correlation Between SGS SA and VirnetX Holding
Can any of the company-specific risk be diversified away by investing in both SGS SA and VirnetX Holding 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 SGS SA and VirnetX Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGS SA and VirnetX Holding Corp, you can compare the effects of market volatilities on SGS SA and VirnetX Holding 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 SGS SA with a short position of VirnetX Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGS SA and VirnetX Holding.
Diversification Opportunities for SGS SA and VirnetX Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SGS and VirnetX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA and VirnetX Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirnetX Holding Corp and SGS SA 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 SGS SA are associated (or correlated) with VirnetX Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VirnetX Holding Corp has no effect on the direction of SGS SA i.e., SGS SA and VirnetX Holding go up and down completely randomly.
Pair Corralation between SGS SA and VirnetX Holding
Assuming the 90 days horizon SGS SA is expected to generate 0.33 times more return on investment than VirnetX Holding. However, SGS SA is 3.03 times less risky than VirnetX Holding. It trades about 0.06 of its potential returns per unit of risk. VirnetX Holding Corp is currently generating about -0.02 per unit of risk. If you would invest 802.00 in SGS SA on September 4, 2024 and sell it today you would earn a total of 181.00 from holding SGS SA or generate 22.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
SGS SA vs. VirnetX Holding Corp
Performance |
| Timeline |
| SGS SA |
| VirnetX Holding Corp |
SGS SA and VirnetX Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGS SA and VirnetX Holding
The main advantage of trading using opposite SGS SA and VirnetX Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGS SA position performs unexpectedly, VirnetX Holding 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 VirnetX Holding will offset losses from the drop in VirnetX Holding's long position.| SGS SA vs. Valens | SGS SA vs. Perseus Mining Limited | SGS SA vs. Vishay Intertechnology | SGS SA vs. MagnaChip Semiconductor |
| VirnetX Holding vs. Hub Cyber Security | VirnetX Holding vs. authID Inc | VirnetX Holding vs. Aurora Mobile | VirnetX Holding vs. Taoping |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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