Correlation Between Visa and Malacca Straits
Can any of the company-specific risk be diversified away by investing in both Visa and Malacca Straits 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 Malacca Straits 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 Malacca Straits Acquisition, you can compare the effects of market volatilities on Visa and Malacca Straits 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 Malacca Straits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Malacca Straits.
Diversification Opportunities for Visa and Malacca Straits
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Malacca is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Malacca Straits Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malacca Straits Acqu 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 Malacca Straits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malacca Straits Acqu has no effect on the direction of Visa i.e., Visa and Malacca Straits go up and down completely randomly.
Pair Corralation between Visa and Malacca Straits
If you would invest 27,883 in Visa Class A on September 6, 2024 and sell it today you would earn a total of 3,107 from holding Visa Class A or generate 11.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 1.59% |
Values | Daily Returns |
Visa Class A vs. Malacca Straits Acquisition
Performance |
Timeline |
Visa Class A |
Malacca Straits Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Malacca Straits Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Malacca Straits
The main advantage of trading using opposite Visa and Malacca Straits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Malacca Straits 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 Malacca Straits will offset losses from the drop in Malacca Straits' long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |