Correlation Between Visa and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Visa and Hanwha Life 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 Hanwha Life 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 Hanwha Life Insurance, you can compare the effects of market volatilities on Visa and Hanwha Life 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 Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Hanwha Life.
Diversification Opportunities for Visa and Hanwha Life
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Hanwha is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Visa i.e., Visa and Hanwha Life go up and down completely randomly.
Pair Corralation between Visa and Hanwha Life
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.56 times more return on investment than Hanwha Life. However, Visa Class A is 1.79 times less risky than Hanwha Life. It trades about 0.08 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about 0.0 per unit of risk. If you would invest 26,972 in Visa Class A on October 12, 2024 and sell it today you would earn a total of 4,288 from holding Visa Class A or generate 15.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.26% |
| Values | Daily Returns |
Visa Class A vs. Hanwha Life Insurance
Performance |
| Timeline |
| Visa Class A |
| Hanwha Life Insurance |
Visa and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Hanwha Life
The main advantage of trading using opposite Visa and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Hanwha Life 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 Hanwha Life will offset losses from the drop in Hanwha Life'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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