Correlation Between Bayview Acquisition and Visa
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition 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 Bayview Acquisition and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayview Acquisition Corp and Visa Class A, you can compare the effects of market volatilities on Bayview Acquisition 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 Bayview Acquisition with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Visa.
Diversification Opportunities for Bayview Acquisition and Visa
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bayview and Visa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp 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 Bayview Acquisition 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 Bayview Acquisition Corp 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 Bayview Acquisition i.e., Bayview Acquisition and Visa go up and down completely randomly.
Pair Corralation between Bayview Acquisition and Visa
Given the investment horizon of 90 days Bayview Acquisition is expected to generate 4.01 times less return on investment than Visa. But when comparing it to its historical volatility, Bayview Acquisition Corp is 5.81 times less risky than Visa. It trades about 0.14 of its potential returns per unit of risk. Visa Class A is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 27,343 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 4,165 from holding Visa Class A or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. Visa Class A
Performance |
| Timeline |
| Bayview Acquisition Corp |
| Visa Class A |
Bayview Acquisition and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and Visa
The main advantage of trading using opposite Bayview Acquisition and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition 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.| Bayview Acquisition vs. Alpha One | Bayview Acquisition vs. Manaris Corp | Bayview Acquisition vs. SCOR PK | Bayview Acquisition vs. Aquagold International |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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