Correlation Between STORE ELECTRONIC and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and Virtu Financial, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and Virtu Financial.
Diversification Opportunities for STORE ELECTRONIC and Virtu Financial
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between STORE and Virtu is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and Virtu Financial go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and Virtu Financial
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 2.28 times more return on investment than Virtu Financial. However, STORE ELECTRONIC is 2.28 times more volatile than Virtu Financial. It trades about 0.36 of its potential returns per unit of risk. Virtu Financial is currently generating about -0.03 per unit of risk. If you would invest 13,150 in STORE ELECTRONIC on October 12, 2024 and sell it today you would earn a total of 3,470 from holding STORE ELECTRONIC or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. Virtu Financial
Performance |
| Timeline |
| STORE ELECTRONIC |
| Virtu Financial |
STORE ELECTRONIC and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and Virtu Financial
The main advantage of trading using opposite STORE ELECTRONIC and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.| STORE ELECTRONIC vs. Canon Marketing Japan | STORE ELECTRONIC vs. BJs Wholesale Club | STORE ELECTRONIC vs. SIDETRADE EO 1 | STORE ELECTRONIC vs. FAST RETAIL ADR |
| Virtu Financial vs. UET United Electronic | Virtu Financial vs. STMICROELECTRONICS | Virtu Financial vs. STORE ELECTRONIC | Virtu Financial vs. KIMBALL ELECTRONICS |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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