Correlation Between Visa and GS Retail
Can any of the company-specific risk be diversified away by investing in both Visa and GS Retail 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 GS Retail 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 GS Retail Co, you can compare the effects of market volatilities on Visa and GS Retail 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 GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and GS Retail.
Diversification Opportunities for Visa and GS Retail
Very good diversification
The 3 months correlation between Visa and 007070 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Visa i.e., Visa and GS Retail go up and down completely randomly.
Pair Corralation between Visa and GS Retail
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.53 times more return on investment than GS Retail. However, Visa Class A is 1.87 times less risky than GS Retail. It trades about 0.38 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.24 per unit of risk. If you would invest 31,531 in Visa Class A on October 31, 2024 and sell it today you would earn a total of 2,070 from holding Visa Class A or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Visa Class A vs. GS Retail Co
Performance |
| Timeline |
| Visa Class A |
| GS Retail |
Visa and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and GS Retail
The main advantage of trading using opposite Visa and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| GS Retail vs. Seoyon Topmetal Co | GS Retail vs. Lotte Non Life Insurance | GS Retail vs. Lotte Chilsung Beverage | GS Retail vs. Hanjin Transportation Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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