Correlation Between Visa and PT Charoen
Can any of the company-specific risk be diversified away by investing in both Visa and PT Charoen 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 PT Charoen 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 PT Charoen Pokphand, you can compare the effects of market volatilities on Visa and PT Charoen 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 PT Charoen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PT Charoen.
Diversification Opportunities for Visa and PT Charoen
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and 0CP1 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PT Charoen Pokphand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Charoen Pokphand 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 PT Charoen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Charoen Pokphand has no effect on the direction of Visa i.e., Visa and PT Charoen go up and down completely randomly.
Pair Corralation between Visa and PT Charoen
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.32 times more return on investment than PT Charoen. However, Visa Class A is 3.16 times less risky than PT Charoen. It trades about 0.08 of its potential returns per unit of risk. PT Charoen Pokphand is currently generating about -0.05 per unit of risk. If you would invest 31,319 in Visa Class A on September 24, 2024 and sell it today you would earn a total of 452.00 from holding Visa Class A or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. PT Charoen Pokphand
Performance |
| Timeline |
| Visa Class A |
| PT Charoen Pokphand |
Visa and PT Charoen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PT Charoen
The main advantage of trading using opposite Visa and PT Charoen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PT Charoen 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 PT Charoen will offset losses from the drop in PT Charoen's long position.| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
| PT Charoen vs. Archer Daniels Midland | PT Charoen vs. Tyson Foods | PT Charoen vs. Wilmar International Limited | PT Charoen vs. MOWI ASA SPADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |