Correlation Between Visa and IAGLN
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By analyzing existing cross correlation between Visa Class A and IAGLN 425 15 NOV 32, you can compare the effects of market volatilities on Visa and IAGLN 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 IAGLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and IAGLN.
Diversification Opportunities for Visa and IAGLN
Poor diversification
The 3 months correlation between Visa and IAGLN is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and IAGLN 425 15 NOV 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAGLN 425 15 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 IAGLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAGLN 425 15 has no effect on the direction of Visa i.e., Visa and IAGLN go up and down completely randomly.
Pair Corralation between Visa and IAGLN
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.67 times more return on investment than IAGLN. However, Visa Class A is 1.5 times less risky than IAGLN. It trades about 0.12 of its potential returns per unit of risk. IAGLN 425 15 NOV 32 is currently generating about -0.05 per unit of risk. If you would invest 28,808 in Visa Class A on September 23, 2024 and sell it today you would earn a total of 2,963 from holding Visa Class A or generate 10.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 33.85% |
Values | Daily Returns |
Visa Class A vs. IAGLN 425 15 NOV 32
Performance |
Timeline |
Visa Class A |
IAGLN 425 15 |
Visa and IAGLN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and IAGLN
The main advantage of trading using opposite Visa and IAGLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, IAGLN 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 IAGLN will offset losses from the drop in IAGLN's long position.The idea behind Visa Class A and IAGLN 425 15 NOV 32 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.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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