Correlation Between Visa and Columbia Global
Can any of the company-specific risk be diversified away by investing in both Visa and Columbia Global 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 Columbia Global 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 Columbia Global Equity, you can compare the effects of market volatilities on Visa and Columbia Global 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 Columbia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Columbia Global.
Diversification Opportunities for Visa and Columbia Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Columbia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Columbia Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Equity 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 Columbia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Equity has no effect on the direction of Visa i.e., Visa and Columbia Global go up and down completely randomly.
Pair Corralation between Visa and Columbia Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.4 times more return on investment than Columbia Global. However, Visa is 2.4 times more volatile than Columbia Global Equity. It trades about 0.11 of its potential returns per unit of risk. Columbia Global Equity is currently generating about 0.14 per unit of risk. If you would invest 28,342 in Visa Class A on September 11, 2024 and sell it today you would earn a total of 2,488 from holding Visa Class A or generate 8.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. Columbia Global Equity
Performance |
Timeline |
Visa Class A |
Columbia Global Equity |
Visa and Columbia Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Columbia Global
The main advantage of trading using opposite Visa and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Columbia Global 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 Columbia Global will offset losses from the drop in Columbia Global's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
Columbia Global vs. John Hancock Variable | Columbia Global vs. Calvert Conservative Allocation | Columbia Global vs. Praxis Genesis Servative | Columbia Global vs. Mutual Of America |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |