Correlation Between Visa and YiDong Electronics
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By analyzing existing cross correlation between Visa Class A and YiDong Electronics Technology, you can compare the effects of market volatilities on Visa and YiDong Electronics 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 YiDong Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and YiDong Electronics.
Diversification Opportunities for Visa and YiDong Electronics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and YiDong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and YiDong Electronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YiDong Electronics 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 YiDong Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YiDong Electronics has no effect on the direction of Visa i.e., Visa and YiDong Electronics go up and down completely randomly.
Pair Corralation between Visa and YiDong Electronics
Taking into account the 90-day investment horizon Visa is expected to generate 1.09 times less return on investment than YiDong Electronics. But when comparing it to its historical volatility, Visa Class A is 6.77 times less risky than YiDong Electronics. It trades about 0.49 of its potential returns per unit of risk. YiDong Electronics Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,019 in YiDong Electronics Technology on November 2, 2024 and sell it today you would earn a total of 126.00 from holding YiDong Electronics Technology or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. YiDong Electronics Technology
Performance |
| Timeline |
| Visa Class A |
| YiDong Electronics |
Visa and YiDong Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and YiDong Electronics
The main advantage of trading using opposite Visa and YiDong Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, YiDong Electronics 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 YiDong Electronics will offset losses from the drop in YiDong Electronics' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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