Correlation Between Visa and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Visa and Amtran Technology 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 Amtran Technology 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 Amtran Technology Co, you can compare the effects of market volatilities on Visa and Amtran Technology 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 Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amtran Technology.
Diversification Opportunities for Visa and Amtran Technology
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Amtran is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology 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 Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Visa i.e., Visa and Amtran Technology go up and down completely randomly.
Pair Corralation between Visa and Amtran Technology
Taking into account the 90-day investment horizon Visa is expected to generate 1.97 times less return on investment than Amtran Technology. But when comparing it to its historical volatility, Visa Class A is 2.46 times less risky than Amtran Technology. It trades about 0.09 of its potential returns per unit of risk. Amtran Technology Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Amtran Technology Co on August 27, 2024 and sell it today you would earn a total of 985.00 from holding Amtran Technology Co or generate 97.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Visa Class A vs. Amtran Technology Co
Performance |
| Timeline |
| Visa Class A |
| Amtran Technology |
Visa and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amtran Technology
The main advantage of trading using opposite Visa and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Amtran Technology 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Amtran Technology vs. Taiwan Semiconductor Manufacturing | Amtran Technology vs. Hon Hai Precision | Amtran Technology vs. MediaTek | Amtran Technology vs. Chunghwa Telecom 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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