Correlation Between AviChina Industry and VirTra

Can any of the company-specific risk be diversified away by investing in both AviChina Industry and VirTra 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 AviChina Industry and VirTra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AviChina Industry Technology and VirTra Inc, you can compare the effects of market volatilities on AviChina Industry and VirTra 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 AviChina Industry with a short position of VirTra. Check out your portfolio center. Please also check ongoing floating volatility patterns of AviChina Industry and VirTra.

Diversification Opportunities for AviChina Industry and VirTra

0.0

Correlation Coefficient

AviChina Industry  VirTra

Pay attention - limited upside

The 3 months correlation between AviChina and VirTra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AviChina Industry Technology and VirTra Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirTra Inc and AviChina Industry 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 AviChina Industry Technology are associated (or correlated) with VirTra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VirTra Inc has no effect on the direction of AviChina Industry i.e., AviChina Industry and VirTra go up and down completely randomly.

Pair Corralation between AviChina Industry and VirTra

If you would invest  37.00  in AviChina Industry Technology on December 29, 2024 and sell it today you would earn a total of  0.00  from holding AviChina Industry Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AviChina Industry Technology  vs.  VirTra Inc

AviChina Industry

Risk-Adjusted Performance

Very Weak

Over the last 90 days AviChina Industry Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, AviChina Industry is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

VirTra Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days VirTra Inc 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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with AviChina Industry and VirTra

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

The idea behind AviChina Industry Technology and VirTra Inc 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.