Correlation Between General Dynamics and Virgin Galactic
Can any of the company-specific risk be diversified away by investing in both General Dynamics and Virgin Galactic 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 General Dynamics and Virgin Galactic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Virgin Galactic Holdings, you can compare the effects of market volatilities on General Dynamics and Virgin Galactic 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 General Dynamics with a short position of Virgin Galactic. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Virgin Galactic.
Diversification Opportunities for General Dynamics and Virgin Galactic
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between General and Virgin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Virgin Galactic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Galactic Holdings and General Dynamics 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 General Dynamics are associated (or correlated) with Virgin Galactic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Galactic Holdings has no effect on the direction of General Dynamics i.e., General Dynamics and Virgin Galactic go up and down completely randomly.
Pair Corralation between General Dynamics and Virgin Galactic
Allowing for the 90-day total investment horizon General Dynamics is expected to generate 5.48 times less return on investment than Virgin Galactic. But when comparing it to its historical volatility, General Dynamics is 3.64 times less risky than Virgin Galactic. It trades about 0.16 of its potential returns per unit of risk. Virgin Galactic Holdings is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 281.00 in Virgin Galactic Holdings on May 4, 2025 and sell it today you would earn a total of 87.00 from holding Virgin Galactic Holdings or generate 30.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
General Dynamics vs. Virgin Galactic Holdings
Performance |
Timeline |
General Dynamics |
Virgin Galactic Holdings |
General Dynamics and Virgin Galactic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with General Dynamics and Virgin Galactic
The main advantage of trading using opposite General Dynamics and Virgin Galactic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics position performs unexpectedly, Virgin Galactic 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 Virgin Galactic will offset losses from the drop in Virgin Galactic's long position.General Dynamics vs. Novocure | General Dynamics vs. HubSpot | General Dynamics vs. DigitalOcean Holdings | General Dynamics vs. Appian Corp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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