Correlation Between Noah Holdings and Visa
Can any of the company-specific risk be diversified away by investing in both Noah Holdings 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 Noah Holdings and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noah Holdings and Visa Class A, you can compare the effects of market volatilities on Noah Holdings 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 Noah Holdings with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noah Holdings and Visa.
Diversification Opportunities for Noah Holdings and Visa
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Noah and Visa is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Noah Holdings 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 Noah Holdings 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 Noah Holdings 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 Noah Holdings i.e., Noah Holdings and Visa go up and down completely randomly.
Pair Corralation between Noah Holdings and Visa
Given the investment horizon of 90 days Noah Holdings is expected to under-perform the Visa. In addition to that, Noah Holdings is 4.65 times more volatile than Visa Class A. It trades about 0.0 of its total potential returns per unit of risk. Visa Class A is currently generating about 0.08 per unit of volatility. If you would invest 30,985 in Visa Class A on September 13, 2024 and sell it today you would earn a total of 394.00 from holding Visa Class A or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noah Holdings vs. Visa Class A
Performance |
| Timeline |
| Noah Holdings |
| Visa Class A |
Noah Holdings and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noah Holdings and Visa
The main advantage of trading using opposite Noah Holdings and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noah Holdings 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.| Noah Holdings vs. MFS Investment Grade | Noah Holdings vs. Eaton Vance National | Noah Holdings vs. Nuveen California Select | Noah Holdings vs. Blackrock Munivest |
| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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