Correlation Between Visa and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Visa and Beyond Meat 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 Beyond Meat 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 Beyond Meat, you can compare the effects of market volatilities on Visa and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Beyond Meat.
Diversification Opportunities for Visa and Beyond Meat
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Beyond is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Visa i.e., Visa and Beyond Meat go up and down completely randomly.
Pair Corralation between Visa and Beyond Meat
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.19 times more return on investment than Beyond Meat. However, Visa Class A is 5.31 times less risky than Beyond Meat. It trades about 0.1 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.02 per unit of risk. If you would invest 22,047 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 9,461 from holding Visa Class A or generate 42.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.16% |
| Values | Daily Returns |
Visa Class A vs. Beyond Meat
Performance |
| Timeline |
| Visa Class A |
| Beyond Meat |
Visa and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Beyond Meat
The main advantage of trading using opposite Visa and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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