Correlation Between Virtu Financial and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and OPKO 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 OPKO 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 OPKO HEALTH, you can compare the effects of market volatilities on Virtu Financial and OPKO 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and OPKO HEALTH.
Diversification Opportunities for Virtu Financial and OPKO HEALTH
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and OPKO is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of Virtu Financial i.e., Virtu Financial and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Virtu Financial and OPKO HEALTH
Assuming the 90 days horizon Virtu Financial is expected to generate 2.44 times more return on investment than OPKO HEALTH. However, Virtu Financial is 2.44 times more volatile than OPKO HEALTH. It trades about 0.19 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.09 per unit of risk. If you would invest 3,480 in Virtu Financial on October 28, 2024 and sell it today you would earn a total of 240.00 from holding Virtu Financial or generate 6.9% 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. OPKO HEALTH
Performance |
| Timeline |
| Virtu Financial |
| OPKO HEALTH |
Virtu Financial and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and OPKO HEALTH
The main advantage of trading using opposite Virtu Financial and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, OPKO 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| Virtu Financial vs. Morgan Stanley | Virtu Financial vs. Superior Plus Corp | Virtu Financial vs. Origin Agritech | Virtu Financial vs. Identiv |
| OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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