Correlation Between Visa and Ping An
Can any of the company-specific risk be diversified away by investing in both Visa and Ping An 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 Ping An 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 Ping An Healthcare, you can compare the effects of market volatilities on Visa and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ping An.
Diversification Opportunities for Visa and Ping An
Very weak diversification
The 3 months correlation between Visa and Ping is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Healthcare has no effect on the direction of Visa i.e., Visa and Ping An go up and down completely randomly.
Pair Corralation between Visa and Ping An
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.53 times more return on investment than Ping An. However, Visa Class A is 1.88 times less risky than Ping An. It trades about -0.23 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.21 per unit of risk. If you would invest 35,268 in Visa Class A on January 4, 2025 and sell it today you would lose (3,955) from holding Visa Class A or give up 11.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Ping An Healthcare
Performance |
| Timeline |
| Visa Class A |
| Ping An Healthcare |
Visa and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ping An
The main advantage of trading using opposite Visa and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An'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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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