Correlation Between Visa and Asian Pac
Can any of the company-specific risk be diversified away by investing in both Visa and Asian Pac 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 Asian Pac 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 Asian Pac Holdings, you can compare the effects of market volatilities on Visa and Asian Pac 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 Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Asian Pac.
Diversification Opportunities for Visa and Asian Pac
Pay attention - limited upside
The 3 months correlation between Visa and Asian is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings 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 Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Visa i.e., Visa and Asian Pac go up and down completely randomly.
Pair Corralation between Visa and Asian Pac
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.35 times more return on investment than Asian Pac. However, Visa Class A is 2.87 times less risky than Asian Pac. It trades about 0.26 of its potential returns per unit of risk. Asian Pac Holdings is currently generating about -0.03 per unit of risk. If you would invest 26,911 in Visa Class A on September 25, 2024 and sell it today you would earn a total of 5,154 from holding Visa Class A or generate 19.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Visa Class A vs. Asian Pac Holdings
Performance |
Timeline |
Visa Class A |
Asian Pac Holdings |
Visa and Asian Pac Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Asian Pac
The main advantage of trading using opposite Visa and Asian Pac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Asian Pac 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 Asian Pac will offset losses from the drop in Asian Pac's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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