Correlation Between FibraHotel and Visa
Can any of the company-specific risk be diversified away by investing in both FibraHotel 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 FibraHotel and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Visa Inc, you can compare the effects of market volatilities on FibraHotel 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 FibraHotel with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Visa.
Diversification Opportunities for FibraHotel and Visa
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FibraHotel and Visa is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and FibraHotel 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 FibraHotel 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 Inc has no effect on the direction of FibraHotel i.e., FibraHotel and Visa go up and down completely randomly.
Pair Corralation between FibraHotel and Visa
Assuming the 90 days trading horizon FibraHotel is expected to under-perform the Visa. In addition to that, FibraHotel is 2.29 times more volatile than Visa Inc. It trades about -0.1 of its total potential returns per unit of risk. Visa Inc is currently generating about 0.31 per unit of volatility. If you would invest 706,271 in Visa Inc on December 4, 2024 and sell it today you would earn a total of 40,729 from holding Visa Inc or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibraHotel vs. Visa Inc
Performance |
| Timeline |
| FibraHotel |
| Visa Inc |
FibraHotel and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Visa
The main advantage of trading using opposite FibraHotel and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel 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.| FibraHotel vs. Micron Technology | FibraHotel vs. Air Transport Services | FibraHotel vs. GMxico Transportes SAB | FibraHotel vs. Monster Beverage Corp |
| Visa vs. United Airlines Holdings | Visa vs. Delta Air Lines | Visa vs. Cognizant Technology Solutions | Visa vs. Air Transport Services |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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