Correlation Between Visa and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Visa and Amcor Plc 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 Amcor Plc 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 Amcor plc, you can compare the effects of market volatilities on Visa and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amcor Plc.
Diversification Opportunities for Visa and Amcor Plc
Good diversification
The 3 months correlation between Visa and Amcor is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of Visa i.e., Visa and Amcor Plc go up and down completely randomly.
Pair Corralation between Visa and Amcor Plc
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.63 times more return on investment than Amcor Plc. However, Visa Class A is 1.59 times less risky than Amcor Plc. It trades about 0.12 of its potential returns per unit of risk. Amcor plc is currently generating about 0.02 per unit of risk. If you would invest 28,482 in Visa Class A on September 12, 2024 and sell it today you would earn a total of 2,897 from holding Visa Class A or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Amcor plc
Performance |
| Timeline |
| Visa Class A |
| Amcor plc |
Visa and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amcor Plc
The main advantage of trading using opposite Visa and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Amcor Plc vs. THAI BEVERAGE | Amcor Plc vs. SCANSOURCE | Amcor Plc vs. DATANG INTL POW | Amcor Plc vs. National Storage Affiliates |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |