Correlation Between Virtu Financial and Patterson Companies

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

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

Diversification Opportunities for Virtu Financial and Patterson Companies

0.0

Correlation Coefficient

Virtu Financial  Patterson Companies

Pay attention - limited upside

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

Pair Corralation between Virtu Financial and Patterson Companies

If you would invest  3,400  in Virtu Financial on October 23, 2024 and sell it today you would earn a total of  200.00  from holding Virtu Financial or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Virtu Financial  vs.  Patterson Companies

Virtu Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtu Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Virtu Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Patterson Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patterson Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Patterson Companies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Virtu Financial and Patterson Companies

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

The idea behind Virtu Financial and Patterson Companies 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.