Correlation Between Visa and Xin Chio

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

By analyzing existing cross correlation between Visa Class A and Xin Chio Global, you can compare the effects of market volatilities on Visa and Xin Chio 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 Xin Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Xin Chio.

Diversification Opportunities for Visa and Xin Chio

-0.77

Correlation Coefficient

Visa  Xin Chio

Pay attention - limited upside

The 3 months correlation between Visa and Xin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Xin Chio Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xin Chio Global 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 Xin Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xin Chio Global has no effect on the direction of Visa i.e., Visa and Xin Chio go up and down completely randomly.

Pair Corralation between Visa and Xin Chio

Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.1 times more return on investment than Xin Chio. However, Visa is 1.1 times more volatile than Xin Chio Global. It trades about 0.06 of its potential returns per unit of risk. Xin Chio Global is currently generating about -0.14 per unit of risk. If you would invest  31,185  in Visa Class A on September 20, 2024 and sell it today you would earn a total of  303.00  from holding Visa Class A or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Visa Class A  vs.  Xin Chio Global

Visa Class A

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Xin Chio Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xin Chio Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Visa and Xin Chio

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

The idea behind Visa Class A and Xin Chio Global 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.