Correlation Between Visa and Robit Oyj

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

Diversification Opportunities for Visa and Robit Oyj

-0.9

Correlation Coefficient

Visa  Robit Oyj

Pay attention - limited upside

The 3 months correlation between Visa and Robit is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Robit Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robit Oyj 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 Robit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robit Oyj has no effect on the direction of Visa i.e., Visa and Robit Oyj go up and down completely randomly.

Pair Corralation between Visa and Robit Oyj

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.35 times more return on investment than Robit Oyj. However, Visa Class A is 2.88 times less risky than Robit Oyj. It trades about 0.07 of its potential returns per unit of risk. Robit Oyj is currently generating about -0.05 per unit of risk. If you would invest  22,775  in Visa Class A on September 29, 2024 and sell it today you would earn a total of  9,091  from holding Visa Class A or generate 39.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Visa Class A  vs.  Robit Oyj

Visa Class A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Robit Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robit Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Visa and Robit Oyj

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

The idea behind Visa Class A and Robit Oyj 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 CEOs Directory module to screen CEOs from public companies around the world.