Correlation Between Visa and Asensus Surgical

Can any of the company-specific risk be diversified away by investing in both Visa and Asensus Surgical 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 Asensus Surgical 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 Asensus Surgical, you can compare the effects of market volatilities on Visa and Asensus Surgical 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 Asensus Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Asensus Surgical.

Diversification Opportunities for Visa and Asensus Surgical

-0.15

Correlation Coefficient

Visa  Asensus Surgical

Good diversification

The 3 months correlation between Visa and Asensus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Asensus Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asensus Surgical 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 Asensus Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asensus Surgical has no effect on the direction of Visa i.e., Visa and Asensus Surgical go up and down completely randomly.

Pair Corralation between Visa and Asensus Surgical

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.13 times more return on investment than Asensus Surgical. However, Visa Class A is 7.66 times less risky than Asensus Surgical. It trades about 0.09 of its potential returns per unit of risk. Asensus Surgical is currently generating about 0.0 per unit of risk. If you would invest  20,190  in Visa Class A on September 12, 2024 and sell it today you would earn a total of  11,048  from holding Visa Class A or generate 54.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.85%
Values	Daily Returns

Visa Class A  vs.  Asensus Surgical

Visa Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Asensus Surgical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asensus Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Asensus Surgical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Visa and Asensus Surgical

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

The idea behind Visa Class A and Asensus Surgical 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.