Correlation Between Virtu Financial and Lenovo Group

Can any of the company-specific risk be diversified away by investing in both Virtu Financial and Lenovo Group 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 Lenovo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Virtu Financial and Lenovo Group Limited, you can compare the effects of market volatilities on Virtu Financial and Lenovo Group 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 Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Lenovo Group.

Diversification Opportunities for Virtu Financial and Lenovo Group

0.0

Correlation Coefficient

Virtu Financial  Lenovo Group

Pay attention - limited upside

The 3 months correlation between Virtu and Lenovo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited 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 Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of Virtu Financial i.e., Virtu Financial and Lenovo Group go up and down completely randomly.

Pair Corralation between Virtu Financial and Lenovo Group

If you would invest  2,801  in Virtu Financial on October 24, 2024 and sell it today you would earn a total of  759.00  from holding Virtu Financial or generate 27.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Virtu Financial  vs.  Lenovo Group Limited

Virtu Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtu Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Virtu Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Lenovo Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lenovo Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lenovo Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Virtu Financial and Lenovo Group

The main advantage of trading using opposite Virtu Financial and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial position performs unexpectedly, Lenovo Group 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 Lenovo Group will offset losses from the drop in Lenovo Group's long position.

The idea behind Virtu Financial and Lenovo Group Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.