Correlation Between VirTra and Exela Technologies

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

By analyzing existing cross correlation between VirTra Inc and Exela Technologies Preferred, you can compare the effects of market volatilities on VirTra and Exela Technologies 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 Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirTra and Exela Technologies.

Diversification Opportunities for VirTra and Exela Technologies

-0.52

Correlation Coefficient

VirTra  Exela Technologies

Excellent diversification

The 3 months correlation between VirTra and Exela is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding VirTra Inc and Exela Technologies Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies 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 Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of VirTra i.e., VirTra and Exela Technologies go up and down completely randomly.

Pair Corralation between VirTra and Exela Technologies

Given the investment horizon of 90 days VirTra Inc is expected to generate 0.66 times more return on investment than Exela Technologies. However, VirTra Inc is 1.51 times less risky than Exela Technologies. It trades about 0.07 of its potential returns per unit of risk. Exela Technologies Preferred is currently generating about -0.21 per unit of risk. If you would invest  640.00  in VirTra Inc on September 12, 2024 and sell it today you would earn a total of  85.00  from holding VirTra Inc or generate 13.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.31%
Values	Daily Returns

VirTra Inc  vs.  Exela Technologies Preferred

VirTra Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VirTra Inc are ranked lower than 5 (%) 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.

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with VirTra and Exela Technologies

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

The idea behind VirTra Inc and Exela Technologies Preferred 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.