Correlation Between Star Diamond and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Star Diamond 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 Star Diamond and Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Diamond and Virtu Financial, you can compare the effects of market volatilities on Star Diamond 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 Star Diamond with a short position of Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Diamond and Virtu Financial.
Diversification Opportunities for Star Diamond and Virtu Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Star and Virtu is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Star Diamond and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial and Star Diamond 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 Star Diamond 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 Star Diamond i.e., Star Diamond and Virtu Financial go up and down completely randomly.
Pair Corralation between Star Diamond and Virtu Financial
Assuming the 90 days horizon Star Diamond is expected to generate 5.02 times more return on investment than Virtu Financial. However, Star Diamond is 5.02 times more volatile than Virtu Financial. It trades about 0.03 of its potential returns per unit of risk. Virtu Financial is currently generating about 0.08 per unit of risk. If you would invest 5.50 in Star Diamond on November 28, 2024 and sell it today you would lose (3.35) from holding Star Diamond or give up 60.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Diamond vs. Virtu Financial
Performance |
| Timeline |
| Star Diamond |
| Virtu Financial |
Star Diamond and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Diamond and Virtu Financial
The main advantage of trading using opposite Star Diamond and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Diamond 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.| Star Diamond vs. MAANSHAN IRON H | Star Diamond vs. Sportsmans Warehouse Holdings | Star Diamond vs. COLUMBIA SPORTSWEAR | Star Diamond vs. Gaztransport et technigaz |
| Virtu Financial vs. Vulcan Materials | Virtu Financial vs. Mitsubishi Materials | Virtu Financial vs. Air Lease | Virtu Financial vs. ALBIS LEASING AG |
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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