Correlation Between Visa and LandisGyr Group

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

Diversification Opportunities for Visa and LandisGyr Group

-0.93

Correlation Coefficient

Visa  LandisGyr Group

Pay attention - limited upside

The 3 months correlation between Visa and LandisGyr is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and LandisGyr Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandisGyr Group AG 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 LandisGyr Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandisGyr Group AG has no effect on the direction of Visa i.e., Visa and LandisGyr Group go up and down completely randomly.

Pair Corralation between Visa and LandisGyr Group

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.76 times more return on investment than LandisGyr Group. However, Visa Class A is 1.31 times less risky than LandisGyr Group. It trades about 0.15 of its potential returns per unit of risk. LandisGyr Group AG is currently generating about -0.26 per unit of risk. If you would invest  28,422  in Visa Class A on September 20, 2024 and sell it today you would earn a total of  3,408  from holding Visa Class A or generate 11.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

Visa Class A  vs.  LandisGyr Group AG

Visa Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) 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.

LandisGyr Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LandisGyr Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Visa and LandisGyr Group

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

The idea behind Visa Class A and LandisGyr Group AG 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.