Correlation Between Thales SA and VirTra
Can any of the company-specific risk be diversified away by investing in both Thales SA 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 Thales SA and VirTra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thales SA and VirTra Inc, you can compare the effects of market volatilities on Thales SA 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 Thales SA with a short position of VirTra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thales SA and VirTra.
Diversification Opportunities for Thales SA and VirTra
Very good diversification
The 3 months correlation between Thales and VirTra is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thales SA and VirTra Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirTra Inc and Thales 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 Thales SA 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 Thales SA i.e., Thales SA and VirTra go up and down completely randomly.
Pair Corralation between Thales SA and VirTra
Assuming the 90 days horizon Thales SA is expected to under-perform the VirTra. But the pink sheet apears to be less risky and, when comparing its historical volatility, Thales SA is 2.51 times less risky than VirTra. The pink sheet trades about -0.12 of its potential returns per unit of risk. The VirTra Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 636.00 in VirTra Inc on September 13, 2024 and sell it today you would earn a total of 83.00 from holding VirTra Inc or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thales SA vs. VirTra Inc
Performance |
| Timeline |
| Thales SA |
| VirTra Inc |
Thales SA and VirTra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thales SA and VirTra
The main advantage of trading using opposite Thales SA and VirTra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thales SA 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.| Thales SA vs. VirTra Inc | Thales SA vs. BWX Technologies | Thales SA vs. Embraer SA ADR | Thales SA vs. HEICO |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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