Correlation Between Visa and Asia Polymer
Can any of the company-specific risk be diversified away by investing in both Visa and Asia Polymer 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 Asia Polymer 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 Asia Polymer Corp, you can compare the effects of market volatilities on Visa and Asia Polymer 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 Asia Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Asia Polymer.
Diversification Opportunities for Visa and Asia Polymer
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Asia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Asia Polymer Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Polymer Corp 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 Asia Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Polymer Corp has no effect on the direction of Visa i.e., Visa and Asia Polymer go up and down completely randomly.
Pair Corralation between Visa and Asia Polymer
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.38 times more return on investment than Asia Polymer. However, Visa Class A is 2.62 times less risky than Asia Polymer. It trades about 0.34 of its potential returns per unit of risk. Asia Polymer Corp is currently generating about 0.04 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% 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. Asia Polymer Corp
Performance |
| Timeline |
| Visa Class A |
| Asia Polymer Corp |
Visa and Asia Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Asia Polymer
The main advantage of trading using opposite Visa and Asia Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Asia Polymer 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 Asia Polymer will offset losses from the drop in Asia Polymer's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Asia Polymer vs. Cheng Shin Rubber | Asia Polymer vs. China Steel Chemical | Asia Polymer vs. Yulon Motor Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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