Correlation Between Visa and NH SPAC
Can any of the company-specific risk be diversified away by investing in both Visa and NH SPAC 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 NH SPAC 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 NH SPAC 8, you can compare the effects of market volatilities on Visa and NH SPAC 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 NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NH SPAC.
Diversification Opportunities for Visa and NH SPAC
Very weak diversification
The 3 months correlation between Visa and 218410 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NH SPAC 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 8 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 NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 8 has no effect on the direction of Visa i.e., Visa and NH SPAC go up and down completely randomly.
Pair Corralation between Visa and NH SPAC
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.36 times more return on investment than NH SPAC. However, Visa Class A is 2.81 times less risky than NH SPAC. It trades about 0.08 of its potential returns per unit of risk. NH SPAC 8 is currently generating about -0.03 per unit of risk. If you would invest 22,017 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 9,491 from holding Visa Class A or generate 43.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.26% |
| Values | Daily Returns |
Visa Class A vs. NH SPAC 8
Performance |
| Timeline |
| Visa Class A |
| NH SPAC 8 |
Visa and NH SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NH SPAC
The main advantage of trading using opposite Visa and NH SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NH SPAC 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 NH SPAC will offset losses from the drop in NH SPAC's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| NH SPAC vs. Samsung Electronics Co | NH SPAC vs. Samsung Electronics Co | NH SPAC vs. LG Energy Solution | NH SPAC vs. SK Hynix |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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