Correlation Between Virtu Financial and Moelis
Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Moelis 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 Moelis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Moelis Co, you can compare the effects of market volatilities on Virtu Financial and Moelis 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 Moelis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Moelis.
Diversification Opportunities for Virtu Financial and Moelis
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtu and Moelis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Virtu Financial i.e., Virtu Financial and Moelis go up and down completely randomly.
Pair Corralation between Virtu Financial and Moelis
Given the investment horizon of 90 days Virtu Financial is expected to generate 0.5 times more return on investment than Moelis. However, Virtu Financial is 1.99 times less risky than Moelis. It trades about 0.33 of its potential returns per unit of risk. Moelis Co is currently generating about 0.12 per unit of risk. If you would invest 3,235 in Virtu Financial on August 24, 2024 and sell it today you would earn a total of 548.00 from holding Virtu Financial or generate 16.94% 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. Moelis Co
Performance |
| Timeline |
| Virtu Financial |
| Moelis |
Virtu Financial and Moelis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Moelis
The main advantage of trading using opposite Virtu Financial and Moelis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Moelis 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 Moelis will offset losses from the drop in Moelis' long position.| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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