Correlation Between Visa and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Visa and Jeju Bank 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 Jeju Bank 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 Jeju Bank, you can compare the effects of market volatilities on Visa and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Jeju Bank.
Diversification Opportunities for Visa and Jeju Bank
Pay attention - limited upside
The 3 months correlation between Visa and Jeju is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Visa i.e., Visa and Jeju Bank go up and down completely randomly.
Pair Corralation between Visa and Jeju Bank
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.24 times more return on investment than Jeju Bank. However, Visa Class A is 4.17 times less risky than Jeju Bank. It trades about 0.1 of its potential returns per unit of risk. Jeju Bank is currently generating about 0.01 per unit of risk. If you would invest 24,113 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 7,395 from holding Visa Class A or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.4% |
| Values | Daily Returns |
Visa Class A vs. Jeju Bank
Performance |
| Timeline |
| Visa Class A |
| Jeju Bank |
Visa and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Jeju Bank
The main advantage of trading using opposite Visa and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
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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