Correlation Between LION ONE and Visa
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and Visa Inc, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Visa.
Diversification Opportunities for LION ONE and Visa
Excellent diversification
The 3 months correlation between LION and Visa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and Visa go up and down completely randomly.
Pair Corralation between LION ONE and Visa
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Visa. In addition to that, LION ONE is 3.98 times more volatile than Visa Inc. It trades about -0.08 of its total potential returns per unit of risk. Visa Inc is currently generating about 0.09 per unit of volatility. If you would invest 23,451 in Visa Inc on September 14, 2024 and sell it today you would earn a total of 6,529 from holding Visa Inc or generate 27.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Visa Inc
Performance |
| Timeline |
| LION ONE METALS |
| Visa Inc |
LION ONE and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Visa
The main advantage of trading using opposite LION ONE and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.The idea behind LION ONE METALS and Visa Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Visa vs. TYSON FOODS A | Visa vs. Tower One Wireless | Visa vs. Corporate Office Properties | Visa vs. Siamgas And Petrochemicals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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