Correlation Between Virtu Financial and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Bayview Acquisition 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 Bayview Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Bayview Acquisition Corp, you can compare the effects of market volatilities on Virtu Financial and Bayview Acquisition 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 Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Bayview Acquisition.
Diversification Opportunities for Virtu Financial and Bayview Acquisition
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and Bayview is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp 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 Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of Virtu Financial i.e., Virtu Financial and Bayview Acquisition go up and down completely randomly.
Pair Corralation between Virtu Financial and Bayview Acquisition
Given the investment horizon of 90 days Virtu Financial is expected to generate 12.57 times more return on investment than Bayview Acquisition. However, Virtu Financial is 12.57 times more volatile than Bayview Acquisition Corp. It trades about 0.17 of its potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.15 per unit of risk. If you would invest 1,864 in Virtu Financial on September 1, 2024 and sell it today you would earn a total of 1,867 from holding Virtu Financial or generate 100.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtu Financial vs. Bayview Acquisition Corp
Performance |
| Timeline |
| Virtu Financial |
| Bayview Acquisition Corp |
Virtu Financial and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Bayview Acquisition
The main advantage of trading using opposite Virtu Financial and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Bayview Acquisition 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
| Bayview Acquisition vs. Visa Class A | Bayview Acquisition vs. Diamond Hill Investment | Bayview Acquisition vs. Distoken Acquisition | Bayview Acquisition vs. AllianceBernstein Holding LP |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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