Correlation Between VirTra and Astronics
Can any of the company-specific risk be diversified away by investing in both VirTra and Astronics 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 VirTra and Astronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VirTra Inc and Astronics, you can compare the effects of market volatilities on VirTra and Astronics 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 VirTra with a short position of Astronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirTra and Astronics.
Diversification Opportunities for VirTra and Astronics
Very good diversification
The 3 months correlation between VirTra and Astronics is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding VirTra Inc and Astronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics and VirTra 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 VirTra Inc are associated (or correlated) with Astronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics has no effect on the direction of VirTra i.e., VirTra and Astronics go up and down completely randomly.
Pair Corralation between VirTra and Astronics
Given the investment horizon of 90 days VirTra Inc is expected to under-perform the Astronics. But the stock apears to be less risky and, when comparing its historical volatility, VirTra Inc is 1.02 times less risky than Astronics. The stock trades about -0.18 of its potential returns per unit of risk. The Astronics is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,579 in Astronics on November 3, 2024 and sell it today you would earn a total of 196.00 from holding Astronics or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
VirTra Inc vs. Astronics
Performance |
| Timeline |
| VirTra Inc |
| Astronics |
VirTra and Astronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VirTra and Astronics
The main advantage of trading using opposite VirTra and Astronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VirTra position performs unexpectedly, Astronics 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 Astronics will offset losses from the drop in Astronics' long position.| VirTra vs. Innovative Solutions and | VirTra vs. Park Electrochemical | VirTra vs. Ducommun Incorporated | VirTra vs. National Presto Industries |
| Astronics vs. Ducommun Incorporated | Astronics vs. Innovative Solutions and | Astronics vs. National Presto Industries | Astronics vs. Park Electrochemical |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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