Correlation Between Visa and ORIX
Can any of the company-specific risk be diversified away by investing in both Visa and ORIX 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 ORIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Inc and ORIX Corporation, you can compare the effects of market volatilities on Visa and ORIX 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 ORIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and ORIX.
Diversification Opportunities for Visa and ORIX
Very good diversification
The 3 months correlation between Visa and ORIX is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Visa Inc and ORIX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX 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 Inc are associated (or correlated) with ORIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX has no effect on the direction of Visa i.e., Visa and ORIX go up and down completely randomly.
Pair Corralation between Visa and ORIX
Assuming the 90 days trading horizon Visa Inc is expected to generate 0.58 times more return on investment than ORIX. However, Visa Inc is 1.74 times less risky than ORIX. It trades about 0.1 of its potential returns per unit of risk. ORIX Corporation is currently generating about 0.04 per unit of risk. If you would invest 20,431 in Visa Inc on August 31, 2024 and sell it today you would earn a total of 9,549 from holding Visa Inc or generate 46.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Inc vs. ORIX Corp.
Performance |
| Timeline |
| Visa Inc |
| ORIX |
Visa and ORIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and ORIX
The main advantage of trading using opposite Visa and ORIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, ORIX 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 ORIX will offset losses from the drop in ORIX's long position.| Visa vs. CHEMICAL INDUSTRIES | Visa vs. Siamgas And Petrochemicals | Visa vs. AIR PRODCHEMICALS | Visa vs. COMBA TELECOM SYST |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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