Correlation Between Virtu Financial and PEPKOR
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and PEPKOR 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 PEPKOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and PEPKOR LTD, you can compare the effects of market volatilities on Virtu Financial and PEPKOR 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 PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and PEPKOR.
Diversification Opportunities for Virtu Financial and PEPKOR
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and PEPKOR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of Virtu Financial i.e., Virtu Financial and PEPKOR go up and down completely randomly.
Pair Corralation between Virtu Financial and PEPKOR
Assuming the 90 days horizon Virtu Financial is expected to generate 1.97 times less return on investment than PEPKOR. But when comparing it to its historical volatility, Virtu Financial is 3.04 times less risky than PEPKOR. It trades about 0.21 of its potential returns per unit of risk. PEPKOR LTD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 58.00 in PEPKOR LTD on November 3, 2024 and sell it today you would earn a total of 70.00 from holding PEPKOR LTD or generate 120.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. PEPKOR LTD
Performance |
| Timeline |
| Virtu Financial |
| PEPKOR LTD |
Virtu Financial and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and PEPKOR
The main advantage of trading using opposite Virtu Financial and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR'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 |
| PEPKOR vs. Addus HomeCare | PEPKOR vs. Shin Etsu Chemical Co | PEPKOR vs. HAVERTY FURNITURE A | PEPKOR vs. China BlueChemical |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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