Correlation Between Visa and Moderna
Can any of the company-specific risk be diversified away by investing in both Visa and Moderna 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 Moderna 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 Moderna, you can compare the effects of market volatilities on Visa and Moderna 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 Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Moderna.
Diversification Opportunities for Visa and Moderna
Pay attention - limited upside
The 3 months correlation between Visa and Moderna is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Visa i.e., Visa and Moderna go up and down completely randomly.
Pair Corralation between Visa and Moderna
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.26 times more return on investment than Moderna. However, Visa Class A is 3.87 times less risky than Moderna. It trades about 0.09 of its potential returns per unit of risk. Moderna is currently generating about -0.04 per unit of risk. If you would invest 25,251 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 6,344 from holding Visa Class A or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Visa Class A vs. Moderna
Performance |
| Timeline |
| Visa Class A |
| Moderna |
Visa and Moderna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Moderna
The main advantage of trading using opposite Visa and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Moderna 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 Moderna will offset losses from the drop in Moderna's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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