Correlation Between Visa and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Visa and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Visa and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Jeju Beer.
Diversification Opportunities for Visa and Jeju Beer
Good diversification
The 3 months correlation between Visa and Jeju is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Visa i.e., Visa and Jeju Beer go up and down completely randomly.
Pair Corralation between Visa and Jeju Beer
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.24 times more return on investment than Jeju Beer. However, Visa Class A is 4.13 times less risky than Jeju Beer. It trades about 0.09 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.02 per unit of risk. If you would invest 20,975 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 10,533 from holding Visa Class A or generate 50.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Visa Class A vs. Jeju Beer Co
Performance |
| Timeline |
| Visa Class A |
| Jeju Beer |
Visa and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Jeju Beer
The main advantage of trading using opposite Visa and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |