Correlation Between Virtu Financial and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Columbia Sportswear 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 Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Columbia Sportswear, you can compare the effects of market volatilities on Virtu Financial and Columbia Sportswear 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 Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Columbia Sportswear.
Diversification Opportunities for Virtu Financial and Columbia Sportswear
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtu and Columbia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear 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 Columbia Sportswear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sportswear has no effect on the direction of Virtu Financial i.e., Virtu Financial and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Virtu Financial and Columbia Sportswear
Assuming the 90 days horizon Virtu Financial is expected to generate 1.25 times more return on investment than Columbia Sportswear. However, Virtu Financial is 1.25 times more volatile than Columbia Sportswear. It trades about 0.09 of its potential returns per unit of risk. Columbia Sportswear is currently generating about 0.01 per unit of risk. If you would invest 1,732 in Virtu Financial on November 7, 2024 and sell it today you would earn a total of 2,108 from holding Virtu Financial or generate 121.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. Columbia Sportswear
Performance |
| Timeline |
| Virtu Financial |
| Columbia Sportswear |
Virtu Financial and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Columbia Sportswear
The main advantage of trading using opposite Virtu Financial and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Columbia Sportswear 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 Columbia Sportswear will offset losses from the drop in Columbia Sportswear's long position.| Virtu Financial vs. National Retail Properties | Virtu Financial vs. Burlington Stores | Virtu Financial vs. Tyson Foods | Virtu Financial vs. PLANT VEDA FOODS |
| Columbia Sportswear vs. Uber Technologies | Columbia Sportswear vs. Guangdong Investment Limited | Columbia Sportswear vs. AGNC INVESTMENT | Columbia Sportswear vs. Kingdee International Software |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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