Correlation Between China Finance and Visa
Can any of the company-specific risk be diversified away by investing in both China Finance 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 China Finance and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Finance and Visa Class A, you can compare the effects of market volatilities on China Finance 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 China Finance with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Finance and Visa.
Diversification Opportunities for China Finance and Visa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Visa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Finance 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 China Finance 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 China Finance 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 China Finance i.e., China Finance and Visa go up and down completely randomly.
Pair Corralation between China Finance and Visa
If you would invest 31,319 in Visa Class A on September 24, 2024 and sell it today you would earn a total of 403.00 from holding Visa Class A or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
China Finance vs. Visa Class A
Performance |
| Timeline |
| China Finance |
| Visa Class A |
China Finance and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Finance and Visa
The main advantage of trading using opposite China Finance and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Finance 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.| China Finance vs. Visa Class A | China Finance vs. Diamond Hill Investment | China Finance vs. Distoken Acquisition | China Finance vs. AllianceBernstein Holding LP |
| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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