Correlation Between VirnetX Holding and Consensus Cloud

Can any of the company-specific risk be diversified away by investing in both VirnetX Holding and Consensus Cloud 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 Consensus Cloud 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 Consensus Cloud Solutions, you can compare the effects of market volatilities on VirnetX Holding and Consensus Cloud 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 Consensus Cloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirnetX Holding and Consensus Cloud.

Diversification Opportunities for VirnetX Holding and Consensus Cloud

0.33

Correlation Coefficient

VirnetX Holding  Consensus Cloud

Weak diversification

The 3 months correlation between VirnetX and Consensus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VirnetX Holding Corp and Consensus Cloud Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consensus Cloud Solutions 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 Consensus Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consensus Cloud Solutions has no effect on the direction of VirnetX Holding i.e., VirnetX Holding and Consensus Cloud go up and down completely randomly.

Pair Corralation between VirnetX Holding and Consensus Cloud

Considering the 90-day investment horizon VirnetX Holding Corp is expected to generate 1.45 times more return on investment than Consensus Cloud. However, VirnetX Holding is 1.45 times more volatile than Consensus Cloud Solutions. It trades about 0.02 of its potential returns per unit of risk. Consensus Cloud Solutions is currently generating about -0.01 per unit of risk. If you would invest  863.00  in VirnetX Holding Corp on January 26, 2025 and sell it today you would lose (18.00) from holding VirnetX Holding Corp or give up 2.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VirnetX Holding Corp  vs.  Consensus Cloud Solutions

VirnetX Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days VirnetX Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, VirnetX Holding is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Consensus Cloud Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Consensus Cloud Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with VirnetX Holding and Consensus Cloud

The main advantage of trading using opposite VirnetX Holding and Consensus Cloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VirnetX Holding position performs unexpectedly, Consensus Cloud 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 Consensus Cloud will offset losses from the drop in Consensus Cloud's long position.

The idea behind VirnetX Holding Corp and Consensus Cloud Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.