Correlation Between Visa and China Union
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By analyzing existing cross correlation between Visa Class A and China Union Holdings, you can compare the effects of market volatilities on Visa and China Union 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 Visa with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and China Union.
Diversification Opportunities for Visa and China Union
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Visa 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 Visa Class A are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Visa i.e., Visa and China Union go up and down completely randomly.
Pair Corralation between Visa and China Union
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.44 times more return on investment than China Union. However, Visa Class A is 2.26 times less risky than China Union. It trades about 0.14 of its potential returns per unit of risk. China Union Holdings is currently generating about -0.62 per unit of risk. If you would invest 31,182 in Visa Class A on September 27, 2024 and sell it today you would earn a total of 883.00 from holding Visa Class A or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Visa Class A vs. China Union Holdings
Performance |
| Timeline |
| Visa Class A |
| China Union Holdings |
Visa and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and China Union
The main advantage of trading using opposite Visa and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
| China Union vs. PetroChina Co Ltd | China Union vs. China Mobile Limited | China Union vs. CNOOC Limited | China Union vs. Ping An Insurance |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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