Correlation Between Virtu Financial and Cipher Mining
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Cipher Mining 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 Cipher Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Cipher Mining, you can compare the effects of market volatilities on Virtu Financial and Cipher Mining 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 Cipher Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Cipher Mining.
Diversification Opportunities for Virtu Financial and Cipher Mining
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and Cipher is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining 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 Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of Virtu Financial i.e., Virtu Financial and Cipher Mining go up and down completely randomly.
Pair Corralation between Virtu Financial and Cipher Mining
Given the investment horizon of 90 days Virtu Financial is expected to generate 1.09 times less return on investment than Cipher Mining. But when comparing it to its historical volatility, Virtu Financial is 4.09 times less risky than Cipher Mining. It trades about 0.4 of its potential returns per unit of risk. Cipher Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Cipher Mining on August 28, 2024 and sell it today you would earn a total of 79.00 from holding Cipher Mining or generate 13.96% 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. Cipher Mining
Performance |
| Timeline |
| Virtu Financial |
| Cipher Mining |
Virtu Financial and Cipher Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Cipher Mining
The main advantage of trading using opposite Virtu Financial and Cipher Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Cipher Mining 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 Cipher Mining will offset losses from the drop in Cipher Mining's long position.| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining vs. Bitfarms |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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