Correlation Between Qinetiq Group and VirTra

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

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

Diversification Opportunities for Qinetiq Group and VirTra

-0.36

Correlation Coefficient

Qinetiq Group  VirTra

Very good diversification

The 3 months correlation between Qinetiq and VirTra is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Qinetiq Group PLC and VirTra Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirTra Inc and Qinetiq Group 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 Qinetiq Group PLC 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 Qinetiq Group i.e., Qinetiq Group and VirTra go up and down completely randomly.

Pair Corralation between Qinetiq Group and VirTra

Assuming the 90 days horizon Qinetiq Group PLC is expected to under-perform the VirTra. In addition to that, Qinetiq Group is 1.18 times more volatile than VirTra Inc. It trades about -0.01 of its total potential returns per unit of risk. VirTra Inc is currently generating about 0.17 per unit of volatility. If you would invest  642.00  in VirTra Inc on October 20, 2024 and sell it today you would earn a total of  41.00  from holding VirTra Inc or generate 6.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Qinetiq Group PLC  vs.  VirTra Inc

Qinetiq Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qinetiq Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

VirTra Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VirTra Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, VirTra demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qinetiq Group and VirTra

The main advantage of trading using opposite Qinetiq Group and VirTra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qinetiq Group 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 Qinetiq Group PLC 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.