Correlation Between Virtu Financial and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and CHINA SOUTHN 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 CHINA SOUTHN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and CHINA SOUTHN AIR H , you can compare the effects of market volatilities on Virtu Financial and CHINA SOUTHN 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 CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and CHINA SOUTHN.
Diversification Opportunities for Virtu Financial and CHINA SOUTHN
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and CHINA is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR 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 CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of Virtu Financial i.e., Virtu Financial and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between Virtu Financial and CHINA SOUTHN
Assuming the 90 days horizon Virtu Financial is expected to generate 0.68 times more return on investment than CHINA SOUTHN. However, Virtu Financial is 1.47 times less risky than CHINA SOUTHN. It trades about 0.08 of its potential returns per unit of risk. CHINA SOUTHN AIR H is currently generating about -0.01 per unit of risk. If you would invest 1,653 in Virtu Financial on October 12, 2024 and sell it today you would earn a total of 1,907 from holding Virtu Financial or generate 115.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Virtu Financial vs. CHINA SOUTHN AIR H
Performance |
| Timeline |
| Virtu Financial |
| CHINA SOUTHN AIR |
Virtu Financial and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and CHINA SOUTHN
The main advantage of trading using opposite Virtu Financial and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, CHINA SOUTHN 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 CHINA SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.| Virtu Financial vs. Compagnie Plastic Omnium | Virtu Financial vs. Corporate Office Properties | Virtu Financial vs. APPLIED MATERIALS | Virtu Financial vs. THRACE PLASTICS |
| CHINA SOUTHN vs. Insurance Australia Group | CHINA SOUTHN vs. QBE Insurance Group | CHINA SOUTHN vs. SBI Insurance Group | CHINA SOUTHN vs. Reinsurance Group of |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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