Correlation Between Virtu Financial and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and CaixaBank 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 Virtu Financial and CaixaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and CaixaBank SA, you can compare the effects of market volatilities on Virtu Financial and CaixaBank 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 Virtu Financial with a short position of CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and CaixaBank.
Diversification Opportunities for Virtu Financial and CaixaBank
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtu and CaixaBank is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA and Virtu Financial 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 Virtu Financial are associated (or correlated) with CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of Virtu Financial i.e., Virtu Financial and CaixaBank go up and down completely randomly.
Pair Corralation between Virtu Financial and CaixaBank
Assuming the 90 days horizon Virtu Financial is expected to generate 1.14 times more return on investment than CaixaBank. However, Virtu Financial is 1.14 times more volatile than CaixaBank SA. It trades about 0.08 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.07 per unit of risk. If you would invest 1,685 in Virtu Financial on October 16, 2024 and sell it today you would earn a total of 1,695 from holding Virtu Financial or generate 100.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Virtu Financial vs. CaixaBank SA
Performance |
| Timeline |
| Virtu Financial |
| CaixaBank SA |
Virtu Financial and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and CaixaBank
The main advantage of trading using opposite Virtu Financial and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, CaixaBank 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 CaixaBank will offset losses from the drop in CaixaBank's long position.| Virtu Financial vs. VARIOUS EATERIES LS | Virtu Financial vs. Lamar Advertising | Virtu Financial vs. BOS BETTER ONLINE | Virtu Financial vs. Coffee Holding Co |
| CaixaBank vs. BNP Paribas SA | CaixaBank vs. BNP PARIBAS ADR | CaixaBank vs. Intesa Sanpaolo SpA | CaixaBank vs. Lloyds Banking Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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