Correlation Between Nextera Energy and Virgin Galactic
Can any of the company-specific risk be diversified away by investing in both Nextera Energy and Virgin Galactic 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 Nextera Energy and Virgin Galactic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextera Energy and Virgin Galactic Holdings, you can compare the effects of market volatilities on Nextera Energy and Virgin Galactic 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 Nextera Energy with a short position of Virgin Galactic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextera Energy and Virgin Galactic.
Diversification Opportunities for Nextera Energy and Virgin Galactic
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextera and Virgin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nextera Energy and Virgin Galactic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Galactic Holdings and Nextera Energy 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 Nextera Energy are associated (or correlated) with Virgin Galactic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Galactic Holdings has no effect on the direction of Nextera Energy i.e., Nextera Energy and Virgin Galactic go up and down completely randomly.
Pair Corralation between Nextera Energy and Virgin Galactic
Considering the 90-day investment horizon Nextera Energy is expected to generate 2.24 times less return on investment than Virgin Galactic. But when comparing it to its historical volatility, Nextera Energy is 3.28 times less risky than Virgin Galactic. It trades about 0.14 of its potential returns per unit of risk. Virgin Galactic Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Virgin Galactic Holdings on August 18, 2025 and sell it today you would earn a total of 67.00 from holding Virgin Galactic Holdings or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextera Energy vs. Virgin Galactic Holdings
Performance |
| Timeline |
| Nextera Energy |
| Virgin Galactic Holdings |
Nextera Energy and Virgin Galactic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextera Energy and Virgin Galactic
The main advantage of trading using opposite Nextera Energy and Virgin Galactic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextera Energy position performs unexpectedly, Virgin Galactic 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 Galactic will offset losses from the drop in Virgin Galactic's long position.| Nextera Energy vs. Southern Company | Nextera Energy vs. Duke Energy | Nextera Energy vs. GE Vernova LLC | Nextera Energy vs. National Grid PLC |
| Virgin Galactic vs. United Rentals | Virgin Galactic vs. FedEx | Virgin Galactic vs. Canadian National Railway | Virgin Galactic vs. Cummins |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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