Correlation Between VirnetX Holding and FEDEX

Can any of the company-specific risk be diversified away by investing in both VirnetX Holding and FEDEX 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 FEDEX 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 FEDEX P 42, you can compare the effects of market volatilities on VirnetX Holding and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirnetX Holding and FEDEX.

Diversification Opportunities for VirnetX Holding and FEDEX

0.39

Correlation Coefficient

VirnetX Holding  FEDEX

Weak diversification

The 3 months correlation between VirnetX and FEDEX is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding VirnetX Holding Corp and FEDEX P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 42 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 42 has no effect on the direction of VirnetX Holding i.e., VirnetX Holding and FEDEX go up and down completely randomly.

Pair Corralation between VirnetX Holding and FEDEX

Considering the 90-day investment horizon VirnetX Holding Corp is expected to generate 21.3 times more return on investment than FEDEX. However, VirnetX Holding is 21.3 times more volatile than FEDEX P 42. It trades about 0.05 of its potential returns per unit of risk. FEDEX P 42 is currently generating about -0.16 per unit of risk. If you would invest  705.00  in VirnetX Holding Corp on October 3, 2024 and sell it today you would earn a total of  80.00  from holding VirnetX Holding Corp or generate 11.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

VirnetX Holding Corp  vs.  FEDEX P 42

VirnetX Holding Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VirnetX Holding Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, VirnetX Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

FEDEX P 42

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEDEX P 42 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FEDEX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VirnetX Holding and FEDEX

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

The idea behind VirnetX Holding Corp and FEDEX P 42 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.