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

-0.54

Correlation Coefficient

Visa  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

Visa Class A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Healixa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healixa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Healixa is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.