Correlation Between Visa and COLGATE
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By analyzing existing cross correlation between Visa Class A and COLGATE PALMOLIVE MEDIUM TERM, you can compare the effects of market volatilities on Visa and COLGATE 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 COLGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and COLGATE.
Diversification Opportunities for Visa and COLGATE
Pay attention - limited upside
The 3 months correlation between Visa and COLGATE is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and COLGATE PALMOLIVE MEDIUM TERM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLGATE PALMOLIVE 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 COLGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLGATE PALMOLIVE has no effect on the direction of Visa i.e., Visa and COLGATE go up and down completely randomly.
Pair Corralation between Visa and COLGATE
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.73 times more return on investment than COLGATE. However, Visa Class A is 1.37 times less risky than COLGATE. It trades about 0.23 of its potential returns per unit of risk. COLGATE PALMOLIVE MEDIUM TERM is currently generating about 0.0 per unit of risk. If you would invest 27,117 in Visa Class A on September 26, 2024 and sell it today you would earn a total of 4,605 from holding Visa Class A or generate 16.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 76.19% |
Values | Daily Returns |
Visa Class A vs. COLGATE PALMOLIVE MEDIUM TERM
Performance |
Timeline |
Visa Class A |
COLGATE PALMOLIVE |
Visa and COLGATE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and COLGATE
The main advantage of trading using opposite Visa and COLGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, COLGATE 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 COLGATE will offset losses from the drop in COLGATE's long position.Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
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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.
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