Correlation Between Momentus and Virgin Galactic
Can any of the company-specific risk be diversified away by investing in both Momentus 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 Momentus and Virgin Galactic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentus and Virgin Galactic Holdings, you can compare the effects of market volatilities on Momentus 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 Momentus with a short position of Virgin Galactic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentus and Virgin Galactic.
Diversification Opportunities for Momentus and Virgin Galactic
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Momentus and Virgin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Momentus 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 Momentus 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 Momentus 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 Momentus i.e., Momentus and Virgin Galactic go up and down completely randomly.
Pair Corralation between Momentus and Virgin Galactic
Given the investment horizon of 90 days Momentus is expected to generate 2.57 times more return on investment than Virgin Galactic. However, Momentus is 2.57 times more volatile than Virgin Galactic Holdings. It trades about 0.1 of its potential returns per unit of risk. Virgin Galactic Holdings is currently generating about -0.1 per unit of risk. If you would invest 37.00 in Momentus on July 12, 2024 and sell it today you would earn a total of 69.00 from holding Momentus or generate 186.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Momentus vs. Virgin Galactic Holdings
Performance |
Timeline |
Momentus |
Virgin Galactic Holdings |
Momentus and Virgin Galactic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Momentus and Virgin Galactic
The main advantage of trading using opposite Momentus and Virgin Galactic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentus 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.Momentus vs. Terran Orbital Corp | Momentus vs. Planet Labs PBC | Momentus vs. Rocket Lab USA | Momentus vs. Redwire Corp |
Virgin Galactic vs. Planet Labs PBC | Virgin Galactic vs. Eve Holding | Virgin Galactic vs. Redwire Corp | Virgin Galactic vs. Lockheed Martin |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |