Correlation Between VirnetX Holding and WesBanco

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

Diversification Opportunities for VirnetX Holding and WesBanco

-0.89

Correlation Coefficient

VirnetX Holding  WesBanco

Pay attention - limited upside

The 3 months correlation between VirnetX and WesBanco is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding VirnetX Holding Corp and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco 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 WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of VirnetX Holding i.e., VirnetX Holding and WesBanco go up and down completely randomly.

Pair Corralation between VirnetX Holding and WesBanco

Considering the 90-day investment horizon VirnetX Holding Corp is expected to under-perform the WesBanco. In addition to that, VirnetX Holding is 12.24 times more volatile than WesBanco. It trades about -0.29 of its total potential returns per unit of risk. WesBanco is currently generating about 0.04 per unit of volatility. If you would invest  2,516  in WesBanco on September 21, 2024 and sell it today you would earn a total of  5.00  from holding WesBanco or generate 0.2% return on investment over 90 days.

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

VirnetX Holding Corp  vs.  WesBanco

VirnetX Holding Corp

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

WesBanco

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WesBanco are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, WesBanco is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with VirnetX Holding and WesBanco

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

The idea behind VirnetX Holding Corp and WesBanco 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.