Correlation Between Associates First and Visa
Can any of the company-specific risk be diversified away by investing in both Associates First and Visa 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 Associates First and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associates First Capital and Visa Class A, you can compare the effects of market volatilities on Associates First and Visa 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 Associates First with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associates First and Visa.
Diversification Opportunities for Associates First and Visa
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associates and Visa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Associates First Capital and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Associates First 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 Associates First Capital are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Associates First i.e., Associates First and Visa go up and down completely randomly.
Pair Corralation between Associates First and Visa
If you would invest 28,268 in Visa Class A on August 25, 2024 and sell it today you would earn a total of 2,724 from holding Visa Class A or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associates First Capital vs. Visa Class A
Performance |
| Timeline |
| Associates First Capital |
| Visa Class A |
Associates First and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associates First and Visa
The main advantage of trading using opposite Associates First and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associates First position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| Associates First vs. Visa Class A | Associates First vs. Mastercard | Associates First vs. American Express | Associates First vs. PayPal Holdings |
| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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