Correlation Between Visa and SYSCO

Can any of the company-specific risk be diversified away by investing in both Visa and SYSCO 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 SYSCO 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 SYSCO P 5375, you can compare the effects of market volatilities on Visa and SYSCO 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 SYSCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and SYSCO.

Diversification Opportunities for Visa and SYSCO

-0.68

Correlation Coefficient

Visa  SYSCO

Excellent diversification

The 3 months correlation between Visa and SYSCO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and SYSCO P 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSCO P 5375 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 SYSCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSCO P 5375 has no effect on the direction of Visa i.e., Visa and SYSCO go up and down completely randomly.

Pair Corralation between Visa and SYSCO

Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.09 times more return on investment than SYSCO. However, Visa is 1.09 times more volatile than SYSCO P 5375. It trades about 0.12 of its potential returns per unit of risk. SYSCO P 5375 is currently generating about -0.14 per unit of risk. If you would invest  28,482  in Visa Class A on September 12, 2024 and sell it today you would earn a total of  2,756  from holding Visa Class A or generate 9.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	70.31%
Values	Daily Returns

Visa Class A  vs.  SYSCO P 5375

Visa Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SYSCO P 5375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SYSCO P 5375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SYSCO P 5375 investors.

Pair Trading with Visa and SYSCO

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

The idea behind Visa Class A and SYSCO P 5375 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.