Correlation Between Visa and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both Visa and Walsin Lihwa 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 Walsin Lihwa 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 Walsin Lihwa Corp, you can compare the effects of market volatilities on Visa and Walsin Lihwa 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 Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Walsin Lihwa.
Diversification Opportunities for Visa and Walsin Lihwa
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Walsin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa 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 Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of Visa i.e., Visa and Walsin Lihwa go up and down completely randomly.
Pair Corralation between Visa and Walsin Lihwa
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.58 times more return on investment than Walsin Lihwa. However, Visa Class A is 1.71 times less risky than Walsin Lihwa. It trades about 0.21 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.18 per unit of risk. If you would invest 28,365 in Visa Class A on October 26, 2024 and sell it today you would earn a total of 3,991 from holding Visa Class A or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.65% |
| Values | Daily Returns |
Visa Class A vs. Walsin Lihwa Corp
Performance |
| Timeline |
| Visa Class A |
| Walsin Lihwa Corp |
Visa and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Walsin Lihwa
The main advantage of trading using opposite Visa and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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