Correlation Between Telos Corp and VirnetX Holding

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

By analyzing existing cross correlation between Telos Corp and VirnetX Holding Corp, you can compare the effects of market volatilities on Telos Corp and VirnetX Holding 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 Telos Corp with a short position of VirnetX Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telos Corp and VirnetX Holding.

Diversification Opportunities for Telos Corp and VirnetX Holding

-0.21

Correlation Coefficient

Telos Corp  VirnetX Holding

Very good diversification

The 3 months correlation between Telos and VirnetX is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Telos Corp and VirnetX Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirnetX Holding Corp and Telos Corp 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 Telos Corp are associated (or correlated) with VirnetX Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VirnetX Holding Corp has no effect on the direction of Telos Corp i.e., Telos Corp and VirnetX Holding go up and down completely randomly.

Pair Corralation between Telos Corp and VirnetX Holding

Considering the 90-day investment horizon Telos Corp is expected to under-perform the VirnetX Holding. But the stock apears to be less risky and, when comparing its historical volatility, Telos Corp is 1.13 times less risky than VirnetX Holding. The stock trades about -0.12 of its potential returns per unit of risk. The VirnetX Holding Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  878.00  in VirnetX Holding Corp on December 28, 2024 and sell it today you would lose (120.00) from holding VirnetX Holding Corp or give up 13.67% of portfolio value over 90 days.

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

Telos Corp  vs.  VirnetX Holding Corp

Telos Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest unsteady performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Telos Corp and VirnetX Holding

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

The idea behind Telos Corp and VirnetX Holding Corp 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 Stocks Directory module to find actively traded stocks across global markets.