Correlation Between Scully Royalty and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Scully Royalty 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 Scully Royalty and Virtu Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scully Royalty and Virtu Financial, you can compare the effects of market volatilities on Scully Royalty 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 Scully Royalty with a short position of Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scully Royalty and Virtu Financial.
Diversification Opportunities for Scully Royalty and Virtu Financial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scully and Virtu is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Scully Royalty and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial and Scully Royalty 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 Scully Royalty 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 Scully Royalty i.e., Scully Royalty and Virtu Financial go up and down completely randomly.
Pair Corralation between Scully Royalty and Virtu Financial
Considering the 90-day investment horizon Scully Royalty is expected to generate 2.32 times less return on investment than Virtu Financial. In addition to that, Scully Royalty is 1.78 times more volatile than Virtu Financial. It trades about 0.03 of its total potential returns per unit of risk. Virtu Financial is currently generating about 0.11 per unit of volatility. If you would invest 1,767 in Virtu Financial on September 12, 2024 and sell it today you would earn a total of 1,884 from holding Virtu Financial or generate 106.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scully Royalty vs. Virtu Financial
Performance |
| Timeline |
| Scully Royalty |
| Virtu Financial |
Scully Royalty and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scully Royalty and Virtu Financial
The main advantage of trading using opposite Scully Royalty and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scully Royalty 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.| Scully Royalty vs. Applied Blockchain | Scully Royalty vs. Zhong Yang Financial | Scully Royalty vs. Magic Empire Global | Scully Royalty vs. Lazard |
| Virtu Financial vs. Scully Royalty | Virtu Financial vs. Oppenheimer Holdings | Virtu Financial vs. Houlihan Lokey | Virtu Financial vs. Stonex Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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