Correlation Between Visa and Healixa
Can any of the company-specific risk be diversified away by investing in both Visa and Healixa 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 Healixa 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 Healixa, you can compare the effects of market volatilities on Visa and Healixa 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 Healixa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Healixa.
Diversification Opportunities for Visa and Healixa
Excellent diversification
The 3 months correlation between Visa and Healixa is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Healixa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healixa 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 Healixa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healixa has no effect on the direction of Visa i.e., Visa and Healixa go up and down completely randomly.
Pair Corralation between Visa and Healixa
Taking into account the 90-day investment horizon Visa is expected to generate 18.48 times less return on investment than Healixa. But when comparing it to its historical volatility, Visa Class A is 16.73 times less risky than Healixa. It trades about 0.06 of its potential returns per unit of risk. Healixa is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Healixa on September 17, 2024 and sell it today you would earn a total of 0.00 from holding Healixa or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. Healixa
Performance |
Timeline |
Visa Class A |
Healixa |
Visa and Healixa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Healixa
The main advantage of trading using opposite Visa and Healixa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Healixa 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 Healixa will offset losses from the drop in Healixa's long position.The idea behind Visa Class A and Healixa 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.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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