Correlation Between Virgin Galactic and Redwire Corp
Can any of the company-specific risk be diversified away by investing in both Virgin Galactic and Redwire Corp 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 Redwire Corp 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 Redwire Corp, you can compare the effects of market volatilities on Virgin Galactic and Redwire Corp 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 Redwire Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Galactic and Redwire Corp.
Diversification Opportunities for Virgin Galactic and Redwire Corp
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Virgin and Redwire is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Galactic Holdings and Redwire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwire Corp 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 Redwire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwire Corp has no effect on the direction of Virgin Galactic i.e., Virgin Galactic and Redwire Corp go up and down completely randomly.
Pair Corralation between Virgin Galactic and Redwire Corp
Given the investment horizon of 90 days Virgin Galactic Holdings is expected to under-perform the Redwire Corp. But the stock apears to be less risky and, when comparing its historical volatility, Virgin Galactic Holdings is 2.97 times less risky than Redwire Corp. The stock trades about -0.29 of its potential returns per unit of risk. The Redwire Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,704 in Redwire Corp on November 2, 2024 and sell it today you would earn a total of 573.00 from holding Redwire Corp or generate 33.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Galactic Holdings vs. Redwire Corp
Performance |
| Timeline |
| Virgin Galactic Holdings |
| Redwire Corp |
Virgin Galactic and Redwire Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Galactic and Redwire Corp
The main advantage of trading using opposite Virgin Galactic and Redwire Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Galactic position performs unexpectedly, Redwire Corp 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 Redwire Corp will offset losses from the drop in Redwire Corp's long position.| Virgin Galactic vs. Planet Labs PBC | Virgin Galactic vs. Eve Holding | Virgin Galactic vs. Redwire Corp | Virgin Galactic vs. Lockheed Martin |
| Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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