Correlation Between Visa and Hancom
Can any of the company-specific risk be diversified away by investing in both Visa and Hancom 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 Hancom 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 Hancom Inc, you can compare the effects of market volatilities on Visa and Hancom 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 Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Hancom.
Diversification Opportunities for Visa and Hancom
Poor diversification
The 3 months correlation between Visa and Hancom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc 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 Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Visa i.e., Visa and Hancom go up and down completely randomly.
Pair Corralation between Visa and Hancom
Taking into account the 90-day investment horizon Visa is expected to generate 3.97 times less return on investment than Hancom. But when comparing it to its historical volatility, Visa Class A is 4.77 times less risky than Hancom. It trades about 0.09 of its potential returns per unit of risk. Hancom Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,397,000 in Hancom Inc on September 2, 2024 and sell it today you would earn a total of 1,133,000 from holding Hancom Inc or generate 81.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Visa Class A vs. Hancom Inc
Performance |
| Timeline |
| Visa Class A |
| Hancom Inc |
Visa and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Hancom
The main advantage of trading using opposite Visa and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Hancom vs. Dongsin Engineering Construction | Hancom vs. Doosan Fuel Cell | Hancom vs. Daishin Balance 1 | Hancom vs. Total Soft Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |