Correlation Between Vacasa and Virgin Australia

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

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

Diversification Opportunities for Vacasa and Virgin Australia

0.0

Correlation Coefficient

Vacasa  Virgin Australia

Pay attention - limited upside

The 3 months correlation between Vacasa and Virgin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vacasa Inc and Virgin Australia Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Australia Holdings and Vacasa 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 Vacasa Inc are associated (or correlated) with Virgin Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Australia Holdings has no effect on the direction of Vacasa i.e., Vacasa and Virgin Australia go up and down completely randomly.

Pair Corralation between Vacasa and Virgin Australia

If you would invest (100.00) in Virgin Australia Holdings on February 18, 2024 and sell it today you would earn a total of  100.00  from holding Virgin Australia Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vacasa Inc  vs.  Virgin Australia Holdings

Vacasa Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vacasa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Virgin Australia Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virgin Australia Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Virgin Australia is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vacasa and Virgin Australia

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

The idea behind Vacasa Inc and Virgin Australia Holdings 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 Commodity Directory module to find actively traded commodities issued by global exchanges.