Correlation Between BII Railway and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Virtu Financial, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Virtu Financial.
Diversification Opportunities for BII Railway and Virtu Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BII and Virtu is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial and BII Railway 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 BII Railway Transportation 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 BII Railway i.e., BII Railway and Virtu Financial go up and down completely randomly.
Pair Corralation between BII Railway and Virtu Financial
Assuming the 90 days horizon BII Railway Transportation is expected to under-perform the Virtu Financial. But the stock apears to be less risky and, when comparing its historical volatility, BII Railway Transportation is 1.24 times less risky than Virtu Financial. The stock trades about -0.05 of its potential returns per unit of risk. The Virtu Financial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,480 in Virtu Financial on November 4, 2024 and sell it today you would earn a total of 300.00 from holding Virtu Financial or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BII Railway Transportation vs. Virtu Financial
Performance |
| Timeline |
| BII Railway Transpor |
| Virtu Financial |
BII Railway and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and Virtu Financial
The main advantage of trading using opposite BII Railway and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.| BII Railway vs. UNIVERSAL DISPLAY | BII Railway vs. Suntory Beverage Food | BII Railway vs. UNITED UTILITIES GR | BII Railway vs. PLAYTIKA HOLDING DL 01 |
| Virtu Financial vs. Iridium Communications | Virtu Financial vs. CLOVER HEALTH INV | Virtu Financial vs. MAVEN WIRELESS SWEDEN | Virtu Financial vs. SHIP HEALTHCARE HLDGINC |
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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