Correlation Between Visa and Ten Ren
Can any of the company-specific risk be diversified away by investing in both Visa and Ten Ren 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 Ten Ren 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 Ten Ren Tea, you can compare the effects of market volatilities on Visa and Ten Ren 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 Ten Ren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ten Ren.
Diversification Opportunities for Visa and Ten Ren
Excellent diversification
The 3 months correlation between Visa and Ten is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ten Ren Tea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ten Ren Tea 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 Ten Ren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ten Ren Tea has no effect on the direction of Visa i.e., Visa and Ten Ren go up and down completely randomly.
Pair Corralation between Visa and Ten Ren
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.31 times more return on investment than Ten Ren. However, Visa is 2.31 times more volatile than Ten Ren Tea. It trades about 0.34 of its potential returns per unit of risk. Ten Ren Tea is currently generating about -0.33 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Ten Ren Tea
Performance |
| Timeline |
| Visa Class A |
| Ten Ren Tea |
Visa and Ten Ren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ten Ren
The main advantage of trading using opposite Visa and Ten Ren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ten Ren 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 Ten Ren will offset losses from the drop in Ten Ren's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Ten Ren vs. Standard Foods Corp | Ten Ren vs. TTET Union Corp | Ten Ren vs. Great Wall Enterprise | Ten Ren vs. Lian Hwa Foods |
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.
Other Complementary Tools
| Positions Ratings 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 | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |