Correlation Between Euronet Worldwide and VirnetX Holding

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

By analyzing existing cross correlation between Euronet Worldwide and VirnetX Holding Corp, you can compare the effects of market volatilities on Euronet Worldwide and VirnetX Holding 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 Euronet Worldwide with a short position of VirnetX Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euronet Worldwide and VirnetX Holding.

Diversification Opportunities for Euronet Worldwide and VirnetX Holding

-0.54

Correlation Coefficient

Euronet Worldwide  VirnetX Holding

Excellent diversification

The 3 months correlation between Euronet and VirnetX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Euronet Worldwide and VirnetX Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirnetX Holding Corp and Euronet Worldwide 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 Euronet Worldwide are associated (or correlated) with VirnetX Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VirnetX Holding Corp has no effect on the direction of Euronet Worldwide i.e., Euronet Worldwide and VirnetX Holding go up and down completely randomly.

Pair Corralation between Euronet Worldwide and VirnetX Holding

Given the investment horizon of 90 days Euronet Worldwide is expected to generate 1.07 times less return on investment than VirnetX Holding. But when comparing it to its historical volatility, Euronet Worldwide is 2.16 times less risky than VirnetX Holding. It trades about 0.14 of its potential returns per unit of risk. VirnetX Holding Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  845.00  in VirnetX Holding Corp on March 7, 2025 and sell it today you would earn a total of  34.00  from holding VirnetX Holding Corp or generate 4.02% return on investment over 90 days.

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

Euronet Worldwide  vs.  VirnetX Holding Corp

Euronet Worldwide

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Euronet Worldwide are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Euronet Worldwide may actually be approaching a critical reversion point that can send shares even higher in July 2025.

VirnetX Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days VirnetX Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, VirnetX Holding is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Euronet Worldwide and VirnetX Holding

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

The idea behind Euronet Worldwide and VirnetX Holding Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.