Correlation Between VirnetX Holding and Backblaze
Can any of the company-specific risk be diversified away by investing in both VirnetX Holding and Backblaze 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 VirnetX Holding and Backblaze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VirnetX Holding Corp and Backblaze, you can compare the effects of market volatilities on VirnetX Holding and Backblaze 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 VirnetX Holding with a short position of Backblaze. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirnetX Holding and Backblaze.
Diversification Opportunities for VirnetX Holding and Backblaze
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between VirnetX and Backblaze is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding VirnetX Holding Corp and Backblaze in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Backblaze and VirnetX Holding 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 VirnetX Holding Corp are associated (or correlated) with Backblaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Backblaze has no effect on the direction of VirnetX Holding i.e., VirnetX Holding and Backblaze go up and down completely randomly.
Pair Corralation between VirnetX Holding and Backblaze
Considering the 90-day investment horizon VirnetX Holding Corp is expected to generate 0.37 times more return on investment than Backblaze. However, VirnetX Holding Corp is 2.67 times less risky than Backblaze. It trades about 0.06 of its potential returns per unit of risk. Backblaze is currently generating about -0.24 per unit of risk. If you would invest 882.00 in VirnetX Holding Corp on December 9, 2024 and sell it today you would earn a total of 18.00 from holding VirnetX Holding Corp or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VirnetX Holding Corp vs. Backblaze
Performance |
| Timeline |
| VirnetX Holding Corp |
| Backblaze |
VirnetX Holding and Backblaze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VirnetX Holding and Backblaze
The main advantage of trading using opposite VirnetX Holding and Backblaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VirnetX Holding position performs unexpectedly, Backblaze 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 Backblaze will offset losses from the drop in Backblaze's long position.| VirnetX Holding vs. Hub Cyber Security | ||
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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