Correlation Between Visa and Netcapital
Can any of the company-specific risk be diversified away by investing in both Visa and Netcapital 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 Netcapital 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 Netcapital, you can compare the effects of market volatilities on Visa and Netcapital 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 Netcapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Netcapital.
Diversification Opportunities for Visa and Netcapital
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and Netcapital is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Netcapital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcapital 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 Netcapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcapital has no effect on the direction of Visa i.e., Visa and Netcapital go up and down completely randomly.
Pair Corralation between Visa and Netcapital
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.13 times more return on investment than Netcapital. However, Visa Class A is 7.78 times less risky than Netcapital. It trades about 0.08 of its potential returns per unit of risk. Netcapital is currently generating about -0.08 per unit of risk. If you would invest 25,641 in Visa Class A on September 11, 2024 and sell it today you would earn a total of 5,189 from holding Visa Class A or generate 20.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. Netcapital
Performance |
Timeline |
Visa Class A |
Netcapital |
Visa and Netcapital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Netcapital
The main advantage of trading using opposite Visa and Netcapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Netcapital 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 Netcapital will offset losses from the drop in Netcapital's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
Netcapital vs. Applied Blockchain | Netcapital vs. Zhong Yang Financial | Netcapital vs. Magic Empire Global | Netcapital vs. Lazard |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |