Correlation Between Visa and Bank Mayapada

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

Diversification Opportunities for Visa and Bank Mayapada

-0.03

Correlation Coefficient

Visa  Bank Mayapada

Good diversification

The 3 months correlation between Visa and Bank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bank Mayapada Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mayapada Intern 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 Bank Mayapada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mayapada Intern has no effect on the direction of Visa i.e., Visa and Bank Mayapada go up and down completely randomly.

Pair Corralation between Visa and Bank Mayapada

Taking into account the 90-day investment horizon Visa is expected to generate 12.39 times less return on investment than Bank Mayapada. But when comparing it to its historical volatility, Visa Class A is 11.79 times less risky than Bank Mayapada. It trades about 0.09 of its potential returns per unit of risk. Bank Mayapada Internasional is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  21,400  in Bank Mayapada Internasional on September 13, 2024 and sell it today you would earn a total of  2,400  from holding Bank Mayapada Internasional or generate 11.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Visa Class A  vs.  Bank Mayapada Internasional

Visa Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bank Mayapada Intern

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Mayapada Internasional are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Mayapada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Visa and Bank Mayapada

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

The idea behind Visa Class A and Bank Mayapada Internasional 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.