Correlation Between Virtu Financial and TravelSky Technology

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

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

Diversification Opportunities for Virtu Financial and TravelSky Technology

-0.63

Correlation Coefficient

Virtu Financial  TravelSky Technology

Excellent diversification

The 3 months correlation between Virtu and TravelSky is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial and TravelSky Technology Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelSky Technology 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 TravelSky Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelSky Technology has no effect on the direction of Virtu Financial i.e., Virtu Financial and TravelSky Technology go up and down completely randomly.

Pair Corralation between Virtu Financial and TravelSky Technology

Given the investment horizon of 90 days Virtu Financial is expected to generate 0.79 times more return on investment than TravelSky Technology. However, Virtu Financial is 1.26 times less risky than TravelSky Technology. It trades about -0.09 of its potential returns per unit of risk. TravelSky Technology Ltd is currently generating about -0.1 per unit of risk. If you would invest  3,703  in Virtu Financial on October 6, 2024 and sell it today you would lose (125.00) from holding Virtu Financial or give up 3.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Virtu Financial  vs.  TravelSky Technology Ltd

Virtu Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtu Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Virtu Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

TravelSky Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TravelSky Technology Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Virtu Financial and TravelSky Technology

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

The idea behind Virtu Financial and TravelSky Technology Ltd 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.