Correlation Between Virtu Financial and JAPAN TOBACCO
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and JAPAN TOBACCO 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 JAPAN TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and JAPAN TOBACCO UNSPADR12, you can compare the effects of market volatilities on Virtu Financial and JAPAN TOBACCO 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 JAPAN TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and JAPAN TOBACCO.
Diversification Opportunities for Virtu Financial and JAPAN TOBACCO
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtu and JAPAN is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 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 JAPAN TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN TOBACCO UNSPADR12 has no effect on the direction of Virtu Financial i.e., Virtu Financial and JAPAN TOBACCO go up and down completely randomly.
Pair Corralation between Virtu Financial and JAPAN TOBACCO
Assuming the 90 days horizon Virtu Financial is expected to generate 1.31 times more return on investment than JAPAN TOBACCO. However, Virtu Financial is 1.31 times more volatile than JAPAN TOBACCO UNSPADR12. It trades about 0.22 of its potential returns per unit of risk. JAPAN TOBACCO UNSPADR12 is currently generating about -0.03 per unit of risk. If you would invest 3,139 in Virtu Financial on November 8, 2024 and sell it today you would earn a total of 801.00 from holding Virtu Financial or generate 25.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. JAPAN TOBACCO UNSPADR12
Performance |
| Timeline |
| Virtu Financial |
| JAPAN TOBACCO UNSPADR12 |
Virtu Financial and JAPAN TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and JAPAN TOBACCO
The main advantage of trading using opposite Virtu Financial and JAPAN TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, JAPAN TOBACCO 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 JAPAN TOBACCO will offset losses from the drop in JAPAN TOBACCO's long position.| Virtu Financial vs. NTT DATA | Virtu Financial vs. Laureate Education | Virtu Financial vs. Alibaba Health Information | Virtu Financial vs. DATAGROUP SE |
| JAPAN TOBACCO vs. US Physical Therapy | JAPAN TOBACCO vs. OPKO HEALTH | JAPAN TOBACCO vs. Phibro Animal Health | JAPAN TOBACCO vs. Renesas Electronics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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