Correlation Between Visa and Singha Estate

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

Diversification Opportunities for Visa and Singha Estate

-0.52

Correlation Coefficient

Visa  Singha Estate

Excellent diversification

The 3 months correlation between Visa and Singha is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Singha Estate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singha Estate Public 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 Singha Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singha Estate Public has no effect on the direction of Visa i.e., Visa and Singha Estate go up and down completely randomly.

Pair Corralation between Visa and Singha Estate

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.63 times more return on investment than Singha Estate. However, Visa Class A is 1.59 times less risky than Singha Estate. It trades about 0.26 of its potential returns per unit of risk. Singha Estate Public is currently generating about -0.08 per unit of risk. If you would invest  26,911  in Visa Class A on September 25, 2024 and sell it today you would earn a total of  5,154  from holding Visa Class A or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Visa Class A  vs.  Singha Estate Public

Visa Class A

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 20 (%) 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.

Singha Estate Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singha Estate Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Visa and Singha Estate

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

The idea behind Visa Class A and Singha Estate Public 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.