Correlation Between VirTra and Boeing

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

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

Diversification Opportunities for VirTra and Boeing

0.36

Correlation Coefficient

VirTra  Boeing

Weak diversification

The 3 months correlation between VirTra and Boeing is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding VirTra Inc and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and VirTra 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 VirTra Inc are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of VirTra i.e., VirTra and Boeing go up and down completely randomly.

Pair Corralation between VirTra and Boeing

Given the investment horizon of 90 days VirTra Inc is expected to under-perform the Boeing. In addition to that, VirTra is 1.09 times more volatile than The Boeing. It trades about -0.14 of its total potential returns per unit of risk. The Boeing is currently generating about 0.0 per unit of volatility. If you would invest  18,072  in The Boeing on December 27, 2024 and sell it today you would lose (217.00) from holding The Boeing or give up 1.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VirTra Inc  vs.  The Boeing

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.

Boeing

Risk-Adjusted Performance

Very Weak

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

Pair Trading with VirTra and Boeing

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

The idea behind VirTra Inc and The Boeing 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.