Correlation Between Virtu Financial and American Express
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and American Express 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 Virtu Financial and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and American Express, you can compare the effects of market volatilities on Virtu Financial and American Express 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 Virtu Financial with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and American Express.
Diversification Opportunities for Virtu Financial and American Express
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtu and American is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and Virtu 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 Virtu Financial are associated (or correlated) with American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of Virtu Financial i.e., Virtu Financial and American Express go up and down completely randomly.
Pair Corralation between Virtu Financial and American Express
Given the investment horizon of 90 days Virtu Financial is expected to generate 0.99 times more return on investment than American Express. However, Virtu Financial is 1.01 times less risky than American Express. It trades about 0.22 of its potential returns per unit of risk. American Express is currently generating about 0.15 per unit of risk. If you would invest 3,042 in Virtu Financial on August 24, 2024 and sell it today you would earn a total of 741.00 from holding Virtu Financial or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. American Express
Performance |
| Timeline |
| Virtu Financial |
| American Express |
Virtu Financial and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and American Express
The main advantage of trading using opposite Virtu Financial and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, American Express 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 American Express will offset losses from the drop in American Express' long position.| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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