Correlation Between Visa and PT Indo
Can any of the company-specific risk be diversified away by investing in both Visa and PT Indo 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 PT Indo 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 PT Indo Tambangraya, you can compare the effects of market volatilities on Visa and PT Indo 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 PT Indo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PT Indo.
Diversification Opportunities for Visa and PT Indo
Very weak diversification
The 3 months correlation between Visa and 3IB is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PT Indo Tambangraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indo Tambangraya 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 PT Indo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indo Tambangraya has no effect on the direction of Visa i.e., Visa and PT Indo go up and down completely randomly.
Pair Corralation between Visa and PT Indo
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.39 times more return on investment than PT Indo. However, Visa Class A is 2.56 times less risky than PT Indo. It trades about 0.49 of its potential returns per unit of risk. PT Indo Tambangraya is currently generating about 0.07 per unit of risk. If you would invest 31,440 in Visa Class A on November 2, 2024 and sell it today you would earn a total of 2,865 from holding Visa Class A or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Visa Class A vs. PT Indo Tambangraya
Performance |
| Timeline |
| Visa Class A |
| PT Indo Tambangraya |
Visa and PT Indo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PT Indo
The main advantage of trading using opposite Visa and PT Indo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PT Indo 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 PT Indo will offset losses from the drop in PT Indo'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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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