Correlation Between Leons Furniture and Visa
Can any of the company-specific risk be diversified away by investing in both Leons Furniture 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 Leons Furniture and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leons Furniture Limited and Visa Inc CDR, you can compare the effects of market volatilities on Leons Furniture 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 Leons Furniture with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leons Furniture and Visa.
Diversification Opportunities for Leons Furniture and Visa
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leons and Visa is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Leons Furniture Limited and Visa Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc CDR and Leons Furniture 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 Leons Furniture Limited 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 CDR has no effect on the direction of Leons Furniture i.e., Leons Furniture and Visa go up and down completely randomly.
Pair Corralation between Leons Furniture and Visa
Assuming the 90 days trading horizon Leons Furniture Limited is expected to generate 2.05 times more return on investment than Visa. However, Leons Furniture is 2.05 times more volatile than Visa Inc CDR. It trades about 0.06 of its potential returns per unit of risk. Visa Inc CDR is currently generating about 0.07 per unit of risk. If you would invest 1,613 in Leons Furniture Limited on September 3, 2024 and sell it today you would earn a total of 1,099 from holding Leons Furniture Limited or generate 68.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leons Furniture Limited vs. Visa Inc CDR
Performance |
| Timeline |
| Leons Furniture |
| Visa Inc CDR |
Leons Furniture and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leons Furniture and Visa
The main advantage of trading using opposite Leons Furniture and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leons Furniture 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.| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. International Zeolite Corp | Leons Furniture vs. European Residential Real |
| Visa vs. Slate Grocery REIT | Visa vs. Quisitive Technology Solutions | Visa vs. Northstar Clean Technologies | Visa vs. Broadcom |
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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