Correlation Between Visa and 4C Group
Can any of the company-specific risk be diversified away by investing in both Visa and 4C Group 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 4C Group 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 4C Group AB, you can compare the effects of market volatilities on Visa and 4C Group 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 4C Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and 4C Group.
Diversification Opportunities for Visa and 4C Group
Pay attention - limited upside
The 3 months correlation between Visa and 4C Group is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and 4C Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4C Group AB 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 4C Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4C Group AB has no effect on the direction of Visa i.e., Visa and 4C Group go up and down completely randomly.
Pair Corralation between Visa and 4C Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.27 times more return on investment than 4C Group. However, Visa Class A is 3.69 times less risky than 4C Group. It trades about 0.09 of its potential returns per unit of risk. 4C Group AB is currently generating about -0.05 per unit of risk. If you would invest 20,419 in Visa Class A on September 24, 2024 and sell it today you would earn a total of 11,352 from holding Visa Class A or generate 55.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Visa Class A vs. 4C Group AB
Performance |
| Timeline |
| Visa Class A |
| 4C Group AB |
Visa and 4C Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and 4C Group
The main advantage of trading using opposite Visa and 4C Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, 4C Group 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 4C Group will offset losses from the drop in 4C Group's long position.| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
| 4C Group vs. B3 Consulting Group | 4C Group vs. Sleep Cycle AB | 4C Group vs. Avensia publ AB | 4C Group vs. CAG Group AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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