Correlation Between Velocity Financial and Tokyu
Can any of the company-specific risk be diversified away by investing in both Velocity Financial and Tokyu 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 Velocity Financial and Tokyu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Velocity Financial Llc and Tokyu, you can compare the effects of market volatilities on Velocity Financial and Tokyu 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 Velocity Financial with a short position of Tokyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Velocity Financial and Tokyu.
Diversification Opportunities for Velocity Financial and Tokyu
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Velocity and Tokyu is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Velocity Financial Llc and Tokyu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu and Velocity Financial 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 Velocity Financial Llc are associated (or correlated) with Tokyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu has no effect on the direction of Velocity Financial i.e., Velocity Financial and Tokyu go up and down completely randomly.
Pair Corralation between Velocity Financial and Tokyu
Considering the 90-day investment horizon Velocity Financial Llc is expected to generate 3.44 times more return on investment than Tokyu. However, Velocity Financial is 3.44 times more volatile than Tokyu. It trades about 0.07 of its potential returns per unit of risk. Tokyu is currently generating about -0.07 per unit of risk. If you would invest 1,109 in Velocity Financial Llc on August 31, 2024 and sell it today you would earn a total of 937.00 from holding Velocity Financial Llc or generate 84.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.72% |
| Values | Daily Returns |
Velocity Financial Llc vs. Tokyu
Performance |
| Timeline |
| Velocity Financial Llc |
| Tokyu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Velocity Financial and Tokyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Velocity Financial and Tokyu
The main advantage of trading using opposite Velocity Financial and Tokyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Velocity Financial position performs unexpectedly, Tokyu 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 Tokyu will offset losses from the drop in Tokyu's long position.| Velocity Financial vs. Guild Holdings Co | Velocity Financial vs. Mr Cooper Group | Velocity Financial vs. Encore Capital Group | Velocity Financial vs. CNFinance Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |