Correlation Between Virtu Financial and Carlyle
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Carlyle 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 Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Carlyle Group, you can compare the effects of market volatilities on Virtu Financial and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Carlyle.
Diversification Opportunities for Virtu Financial and Carlyle
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and Carlyle is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Virtu Financial i.e., Virtu Financial and Carlyle go up and down completely randomly.
Pair Corralation between Virtu Financial and Carlyle
Given the investment horizon of 90 days Virtu Financial is expected to generate 1.01 times more return on investment than Carlyle. However, Virtu Financial is 1.01 times more volatile than Carlyle Group. It trades about 0.14 of its potential returns per unit of risk. Carlyle Group is currently generating about 0.09 per unit of risk. If you would invest 1,768 in Virtu Financial on August 27, 2024 and sell it today you would earn a total of 1,901 from holding Virtu Financial or generate 107.52% 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. Carlyle Group
Performance |
| Timeline |
| Virtu Financial |
| Carlyle Group |
Virtu Financial and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Carlyle
The main advantage of trading using opposite Virtu Financial and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| Virtu Financial vs. Visa Class A | Virtu Financial vs. Diamond Hill Investment | Virtu Financial vs. Distoken Acquisition | Virtu Financial vs. AllianceBernstein Holding LP |
| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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