Correlation Between Virco Manufacturing and Aircastle

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

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

Diversification Opportunities for Virco Manufacturing and Aircastle

0.0

Correlation Coefficient

Virco Manufacturing  Aircastle

Pay attention - limited upside

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

Pair Corralation between Virco Manufacturing and Aircastle

If you would invest  1,004  in Virco Manufacturing on January 29, 2024 and sell it today you would earn a total of  95.00  from holding Virco Manufacturing or generate 9.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.33%
Values	Daily Returns

Virco Manufacturing  vs.  Aircastle Limited

Virco Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virco Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Aircastle Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aircastle Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Aircastle is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Virco Manufacturing and Aircastle

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

The idea behind Virco Manufacturing and Aircastle Limited 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.