Correlation Between Virtu Financial and Natural Health
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Natural Health 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 Natural Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Natural Health Trends, you can compare the effects of market volatilities on Virtu Financial and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Natural Health.
Diversification Opportunities for Virtu Financial and Natural Health
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtu and Natural is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Virtu Financial i.e., Virtu Financial and Natural Health go up and down completely randomly.
Pair Corralation between Virtu Financial and Natural Health
Assuming the 90 days horizon Virtu Financial is expected to generate 0.62 times more return on investment than Natural Health. However, Virtu Financial is 1.61 times less risky than Natural Health. It trades about 0.22 of its potential returns per unit of risk. Natural Health Trends is currently generating about -0.02 per unit of risk. If you would invest 2,801 in Virtu Financial on October 24, 2024 and sell it today you would earn a total of 759.00 from holding Virtu Financial or generate 27.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. Natural Health Trends
Performance |
| Timeline |
| Virtu Financial |
| Natural Health Trends |
Virtu Financial and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Natural Health
The main advantage of trading using opposite Virtu Financial and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| Virtu Financial vs. Morgan Stanley | Virtu Financial vs. Morgan Stanley | Virtu Financial vs. The Charles Schwab | Virtu Financial vs. The Goldman Sachs |
| Natural Health vs. United Insurance Holdings | Natural Health vs. JSC Halyk bank | Natural Health vs. Virtu Financial | Natural Health vs. Eurasia Mining Plc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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