Correlation Between Visa and Barfresh Food

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

Diversification Opportunities for Visa and Barfresh Food

-0.15

Correlation Coefficient

Visa  Barfresh Food

Good diversification

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

Pair Corralation between Visa and Barfresh Food

Taking into account the 90-day investment horizon Visa is expected to generate 5.42 times less return on investment than Barfresh Food. But when comparing it to its historical volatility, Visa Class A is 5.86 times less risky than Barfresh Food. It trades about 0.11 of its potential returns per unit of risk. Barfresh Food Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Barfresh Food Group on August 30, 2024 and sell it today you would earn a total of  131.00  from holding Barfresh Food Group or generate 80.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Barfresh Food Group

Visa Class A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Barfresh Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barfresh Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Visa and Barfresh Food

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

The idea behind Visa Class A and Barfresh Food Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.