Correlation Between Visa and Ciwen Media

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Can any of the company-specific risk be diversified away by investing in both Visa and Ciwen Media 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 Visa and Ciwen Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Ciwen Media Co, you can compare the effects of market volatilities on Visa and Ciwen Media 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 Ciwen Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ciwen Media.

Diversification Opportunities for Visa and Ciwen Media

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Visa and Ciwen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ciwen Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciwen Media 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 Ciwen Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciwen Media has no effect on the direction of Visa i.e., Visa and Ciwen Media go up and down completely randomly.

Pair Corralation between Visa and Ciwen Media

Taking into account the 90-day investment horizon Visa is expected to generate 1.28 times less return on investment than Ciwen Media. But when comparing it to its historical volatility, Visa Class A is 3.37 times less risky than Ciwen Media. It trades about 0.35 of its potential returns per unit of risk. Ciwen Media Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  679.00  in Ciwen Media Co on September 1, 2024 and sell it today you would earn a total of  71.00  from holding Ciwen Media Co or generate 10.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Visa Class A  vs.  Ciwen Media Co

 Performance 
       Timeline  
Visa Class A 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.
Ciwen Media 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ciwen Media Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ciwen Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Visa and Ciwen Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visa and Ciwen Media

The main advantage of trading using opposite Visa and Ciwen Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ciwen Media 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 Ciwen Media will offset losses from the drop in Ciwen Media's long position.
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The idea behind Visa Class A and Ciwen Media Co 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.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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