Correlation Between Virtu Financial and HELIOS TECHS

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

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

Diversification Opportunities for Virtu Financial and HELIOS TECHS

0.8

Correlation Coefficient

Virtu Financial  HELIOS TECHS

Very poor diversification

The 3 months correlation between Virtu and HELIOS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and HELIOS TECHS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HELIOS TECHS INC 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 HELIOS TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HELIOS TECHS INC has no effect on the direction of Virtu Financial i.e., Virtu Financial and HELIOS TECHS go up and down completely randomly.

Pair Corralation between Virtu Financial and HELIOS TECHS

Assuming the 90 days horizon Virtu Financial is expected to generate 0.8 times more return on investment than HELIOS TECHS. However, Virtu Financial is 1.25 times less risky than HELIOS TECHS. It trades about 0.08 of its potential returns per unit of risk. HELIOS TECHS INC is currently generating about 0.0 per unit of risk. If you would invest  1,678  in Virtu Financial on October 4, 2024 and sell it today you would earn a total of  1,802  from holding Virtu Financial or generate 107.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Virtu Financial  vs.  HELIOS TECHS INC

Virtu Financial

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtu Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Virtu Financial reported solid returns over the last few months and may actually be approaching a breakup point.

HELIOS TECHS INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HELIOS TECHS INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, HELIOS TECHS 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 HELIOS TECHS

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

The idea behind Virtu Financial and HELIOS TECHS INC 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.