Correlation Between Virtu Financial and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Geely Automobile Holdings, you can compare the effects of market volatilities on Virtu Financial and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Geely Automobile.
Diversification Opportunities for Virtu Financial and Geely Automobile
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtu and Geely is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Virtu Financial i.e., Virtu Financial and Geely Automobile go up and down completely randomly.
Pair Corralation between Virtu Financial and Geely Automobile
Assuming the 90 days horizon Virtu Financial is expected to generate 1.02 times more return on investment than Geely Automobile. However, Virtu Financial is 1.02 times more volatile than Geely Automobile Holdings. It trades about 0.09 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about -0.17 per unit of risk. If you would invest 3,480 in Virtu Financial on October 25, 2024 and sell it today you would earn a total of 100.00 from holding Virtu Financial or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Virtu Financial vs. Geely Automobile Holdings
Performance |
| Timeline |
| Virtu Financial |
| Geely Automobile Holdings |
Virtu Financial and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Geely Automobile
The main advantage of trading using opposite Virtu Financial and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Virtu Financial vs. CAREER EDUCATION | Virtu Financial vs. CHINA EDUCATION GROUP | Virtu Financial vs. Tencent Music Entertainment | Virtu Financial vs. DEVRY EDUCATION GRP |
| Geely Automobile vs. UNITED UTILITIES GR | Geely Automobile vs. Sunny Optical Technology | Geely Automobile vs. PKSHA TECHNOLOGY INC | Geely Automobile vs. STEEL DYNAMICS |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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