Correlation Between Visa and China Baoan
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By analyzing existing cross correlation between Visa Class A and China Baoan Group, you can compare the effects of market volatilities on Visa and China Baoan 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 Visa with a short position of China Baoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and China Baoan.
Diversification Opportunities for Visa and China Baoan
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and China Baoan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Baoan Group and Visa 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 Visa Class A are associated (or correlated) with China Baoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Baoan Group has no effect on the direction of Visa i.e., Visa and China Baoan go up and down completely randomly.
Pair Corralation between Visa and China Baoan
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.65 times more return on investment than China Baoan. However, Visa Class A is 1.54 times less risky than China Baoan. It trades about 0.08 of its potential returns per unit of risk. China Baoan Group is currently generating about 0.05 per unit of risk. If you would invest 31,319 in Visa Class A on September 24, 2024 and sell it today you would earn a total of 452.00 from holding Visa Class A or generate 1.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Visa Class A vs. China Baoan Group
Performance |
Timeline |
Visa Class A |
China Baoan Group |
Visa and China Baoan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and China Baoan
The main advantage of trading using opposite Visa and China Baoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, China Baoan 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 China Baoan will offset losses from the drop in China Baoan's long position.Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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