Correlation Between Visa and China Glaze
Can any of the company-specific risk be diversified away by investing in both Visa and China Glaze 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 China Glaze 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 China Glaze Co, you can compare the effects of market volatilities on Visa and China Glaze 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 China Glaze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and China Glaze.
Diversification Opportunities for Visa and China Glaze
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and China is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and China Glaze Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Glaze 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 China Glaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Glaze has no effect on the direction of Visa i.e., Visa and China Glaze go up and down completely randomly.
Pair Corralation between Visa and China Glaze
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.46 times more return on investment than China Glaze. However, Visa Class A is 2.15 times less risky than China Glaze. It trades about 0.1 of its potential returns per unit of risk. China Glaze Co is currently generating about -0.07 per unit of risk. If you would invest 26,992 in Visa Class A on October 25, 2024 and sell it today you would earn a total of 5,364 from holding Visa Class A or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Visa Class A vs. China Glaze Co
Performance |
| Timeline |
| Visa Class A |
| China Glaze |
Visa and China Glaze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and China Glaze
The main advantage of trading using opposite Visa and China Glaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, China Glaze 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 China Glaze will offset losses from the drop in China Glaze's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| China Glaze vs. Nan Ya Plastics | China Glaze vs. Formosa Chemicals Fibre | China Glaze vs. China Steel Corp | China Glaze vs. Formosa Petrochemical Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |