Correlation Between Superior Plus and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Virtu Financial 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 Superior Plus and Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Virtu Financial, you can compare the effects of market volatilities on Superior Plus and Virtu Financial 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 Superior Plus with a short position of Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Virtu Financial.
Diversification Opportunities for Superior Plus and Virtu Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Superior and Virtu is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Superior Plus i.e., Superior Plus and Virtu Financial go up and down completely randomly.
Pair Corralation between Superior Plus and Virtu Financial
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Virtu Financial. In addition to that, Superior Plus is 1.06 times more volatile than Virtu Financial. It trades about -0.09 of its total potential returns per unit of risk. Virtu Financial is currently generating about 0.29 per unit of volatility. If you would invest 3,440 in Virtu Financial on November 6, 2024 and sell it today you would earn a total of 400.00 from holding Virtu Financial or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Virtu Financial
Performance |
| Timeline |
| Superior Plus Corp |
| Virtu Financial |
Superior Plus and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Virtu Financial
The main advantage of trading using opposite Superior Plus and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Virtu Financial 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.| Superior Plus vs. Take Two Interactive Software | Superior Plus vs. CORNISH METALS INC | Superior Plus vs. PARKEN Sport Entertainment | Superior Plus vs. Yuexiu Transport Infrastructure |
| Virtu Financial vs. National Retail Properties | Virtu Financial vs. Burlington Stores | Virtu Financial vs. Tyson Foods | Virtu Financial vs. PLANT VEDA FOODS |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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