Correlation Between Virtu Financial and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Whirlpool 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 Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Whirlpool, you can compare the effects of market volatilities on Virtu Financial and Whirlpool 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 Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Whirlpool.
Diversification Opportunities for Virtu Financial and Whirlpool
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtu and Whirlpool is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool 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 Whirlpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whirlpool has no effect on the direction of Virtu Financial i.e., Virtu Financial and Whirlpool go up and down completely randomly.
Pair Corralation between Virtu Financial and Whirlpool
Assuming the 90 days horizon Virtu Financial is expected to generate 0.44 times more return on investment than Whirlpool. However, Virtu Financial is 2.28 times less risky than Whirlpool. It trades about 0.2 of its potential returns per unit of risk. Whirlpool is currently generating about -0.03 per unit of risk. If you would invest 3,520 in Virtu Financial on November 2, 2024 and sell it today you would earn a total of 280.00 from holding Virtu Financial or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. Whirlpool
Performance |
| Timeline |
| Virtu Financial |
| Whirlpool |
Virtu Financial and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Whirlpool
The main advantage of trading using opposite Virtu Financial and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Whirlpool 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 Whirlpool will offset losses from the drop in Whirlpool's long position.| Virtu Financial vs. PKSHA TECHNOLOGY INC | Virtu Financial vs. Playtech plc | Virtu Financial vs. Corporate Travel Management | Virtu Financial vs. AGF Management Limited |
| Whirlpool vs. China Resources Beer | Whirlpool vs. MOLSON RS BEVERAGE | Whirlpool vs. Tsingtao Brewery | Whirlpool vs. THAI BEVERAGE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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