Correlation Between Visa and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both Visa and Roo Hsing 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 Roo Hsing 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 Roo Hsing Co, you can compare the effects of market volatilities on Visa and Roo Hsing 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 Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Roo Hsing.
Diversification Opportunities for Visa and Roo Hsing
Good diversification
The 3 months correlation between Visa and Roo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing 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 Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Visa i.e., Visa and Roo Hsing go up and down completely randomly.
Pair Corralation between Visa and Roo Hsing
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.51 times more return on investment than Roo Hsing. However, Visa Class A is 1.97 times less risky than Roo Hsing. It trades about 0.09 of its potential returns per unit of risk. Roo Hsing Co is currently generating about -0.03 per unit of risk. If you would invest 25,387 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 6,121 from holding Visa Class A or generate 24.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Visa Class A vs. Roo Hsing Co
Performance |
| Timeline |
| Visa Class A |
| Roo Hsing |
Visa and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Roo Hsing
The main advantage of trading using opposite Visa and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Roo Hsing 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 Roo Hsing will offset losses from the drop in Roo Hsing's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Roo Hsing vs. Chaintech Technology Corp | Roo Hsing vs. Avision | Roo Hsing vs. Clevo Co | Roo Hsing vs. Elitegroup Computer Systems |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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