Correlation Between Virtu Financial and Erste Group
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Erste Group 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 Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Erste Group Bank, you can compare the effects of market volatilities on Virtu Financial and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Erste Group.
Diversification Opportunities for Virtu Financial and Erste Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and Erste is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Virtu Financial i.e., Virtu Financial and Erste Group go up and down completely randomly.
Pair Corralation between Virtu Financial and Erste Group
Assuming the 90 days horizon Virtu Financial is expected to generate 1.36 times more return on investment than Erste Group. However, Virtu Financial is 1.36 times more volatile than Erste Group Bank. It trades about 0.08 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.1 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 | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Virtu Financial vs. Erste Group Bank
Performance |
| Timeline |
| Virtu Financial |
| Erste Group Bank |
Virtu Financial and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Erste Group
The main advantage of trading using opposite Virtu Financial and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group'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 |
| Erste Group vs. Scottish Mortgage Investment | Erste Group vs. Japan Asia Investment | Erste Group vs. Ultra Clean Holdings | Erste Group vs. FIRST SAVINGS FINL |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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