Correlation Between Virgin Galactic and Vertical Aerospace
Can any of the company-specific risk be diversified away by investing in both Virgin Galactic and Vertical Aerospace 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 Galactic and Vertical Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Galactic Holdings and Vertical Aerospace, you can compare the effects of market volatilities on Virgin Galactic and Vertical Aerospace 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 Galactic with a short position of Vertical Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Galactic and Vertical Aerospace.
Diversification Opportunities for Virgin Galactic and Vertical Aerospace
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virgin and Vertical is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Galactic Holdings and Vertical Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertical Aerospace and Virgin Galactic 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 Galactic Holdings are associated (or correlated) with Vertical Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertical Aerospace has no effect on the direction of Virgin Galactic i.e., Virgin Galactic and Vertical Aerospace go up and down completely randomly.
Pair Corralation between Virgin Galactic and Vertical Aerospace
Given the investment horizon of 90 days Virgin Galactic Holdings is expected to generate 0.71 times more return on investment than Vertical Aerospace. However, Virgin Galactic Holdings is 1.41 times less risky than Vertical Aerospace. It trades about 0.0 of its potential returns per unit of risk. Vertical Aerospace is currently generating about -0.06 per unit of risk. If you would invest 709.00 in Virgin Galactic Holdings on August 24, 2024 and sell it today you would lose (37.00) from holding Virgin Galactic Holdings or give up 5.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Galactic Holdings vs. Vertical Aerospace
Performance |
| Timeline |
| Virgin Galactic Holdings |
| Vertical Aerospace |
Virgin Galactic and Vertical Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Galactic and Vertical Aerospace
The main advantage of trading using opposite Virgin Galactic and Vertical Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Galactic position performs unexpectedly, Vertical Aerospace 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 Vertical Aerospace will offset losses from the drop in Vertical Aerospace's long position.| Virgin Galactic vs. Planet Labs PBC | Virgin Galactic vs. Eve Holding | Virgin Galactic vs. Redwire Corp | Virgin Galactic vs. Lockheed Martin |
| Vertical Aerospace vs. Archer Aviation | Vertical Aerospace vs. Ehang Holdings | Vertical Aerospace vs. Rocket Lab USA | Vertical Aerospace vs. Lilium NV |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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