Correlation Between Visa and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both Visa and Mgame Corp 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 Mgame Corp 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 Mgame Corp, you can compare the effects of market volatilities on Visa and Mgame Corp 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 Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mgame Corp.
Diversification Opportunities for Visa and Mgame Corp
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Mgame is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp 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 Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of Visa i.e., Visa and Mgame Corp go up and down completely randomly.
Pair Corralation between Visa and Mgame Corp
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.37 times more return on investment than Mgame Corp. However, Visa Class A is 2.72 times less risky than Mgame Corp. It trades about 0.19 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.02 per unit of risk. If you would invest 27,538 in Visa Class A on November 28, 2024 and sell it today you would earn a total of 7,671 from holding Visa Class A or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.04% |
| Values | Daily Returns |
Visa Class A vs. Mgame Corp
Performance |
| Timeline |
| Visa Class A |
| Mgame Corp |
Visa and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Mgame Corp
The main advantage of trading using opposite Visa and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Mgame Corp 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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