Correlation Between Virtu Financial and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Foreign Trade 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 Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Foreign Trade Bank, you can compare the effects of market volatilities on Virtu Financial and Foreign Trade 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 Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Foreign Trade.
Diversification Opportunities for Virtu Financial and Foreign Trade
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and Foreign is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank 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 Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Virtu Financial i.e., Virtu Financial and Foreign Trade go up and down completely randomly.
Pair Corralation between Virtu Financial and Foreign Trade
Given the investment horizon of 90 days Virtu Financial is expected to generate 1.27 times less return on investment than Foreign Trade. In addition to that, Virtu Financial is 1.23 times more volatile than Foreign Trade Bank. It trades about 0.07 of its total potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.12 per unit of volatility. If you would invest 1,432 in Foreign Trade Bank on August 28, 2024 and sell it today you would earn a total of 1,966 from holding Foreign Trade Bank or generate 137.29% 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. Foreign Trade Bank
Performance |
| Timeline |
| Virtu Financial |
| Foreign Trade Bank |
Virtu Financial and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Foreign Trade
The main advantage of trading using opposite Virtu Financial and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade's long position.| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
| Foreign Trade vs. Banco Santander Chile | Foreign Trade vs. Bancolombia SA ADR | Foreign Trade vs. Banco Bradesco SA | Foreign Trade vs. Credicorp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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