Correlation Between Virtu Financial and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Commonwealth Bank 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 Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Commonwealth Bank of, you can compare the effects of market volatilities on Virtu Financial and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Commonwealth Bank.
Diversification Opportunities for Virtu Financial and Commonwealth Bank
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtu and Commonwealth is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Virtu Financial i.e., Virtu Financial and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Virtu Financial and Commonwealth Bank
Assuming the 90 days horizon Virtu Financial is expected to generate 1.61 times more return on investment than Commonwealth Bank. However, Virtu Financial is 1.61 times more volatile than Commonwealth Bank of. It trades about 0.08 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.08 per unit of risk. If you would invest 1,653 in Virtu Financial on October 12, 2024 and sell it today you would earn a total of 1,907 from holding Virtu Financial or generate 115.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. Commonwealth Bank of
Performance |
| Timeline |
| Virtu Financial |
| Commonwealth Bank |
Virtu Financial and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Commonwealth Bank
The main advantage of trading using opposite Virtu Financial and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Virtu Financial vs. Compagnie Plastic Omnium | Virtu Financial vs. Corporate Office Properties | Virtu Financial vs. APPLIED MATERIALS | Virtu Financial vs. THRACE PLASTICS |
| Commonwealth Bank vs. PKSHA TECHNOLOGY INC | Commonwealth Bank vs. STORE ELECTRONIC | Commonwealth Bank vs. Methode Electronics | Commonwealth Bank vs. Amkor Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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