Correlation Between Visa and San Shing
Can any of the company-specific risk be diversified away by investing in both Visa and San Shing 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 San Shing 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 San Shing Fastech, you can compare the effects of market volatilities on Visa and San Shing 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 San Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and San Shing.
Diversification Opportunities for Visa and San Shing
Pay attention - limited upside
The 3 months correlation between Visa and San is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and San Shing Fastech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Shing Fastech 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 San Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Shing Fastech has no effect on the direction of Visa i.e., Visa and San Shing go up and down completely randomly.
Pair Corralation between Visa and San Shing
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.81 times more return on investment than San Shing. However, Visa is 1.81 times more volatile than San Shing Fastech. It trades about 0.09 of its potential returns per unit of risk. San Shing Fastech is currently generating about -0.04 per unit of risk. If you would invest 27,110 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 4,398 from holding Visa Class A or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.65% |
| Values | Daily Returns |
Visa Class A vs. San Shing Fastech
Performance |
| Timeline |
| Visa Class A |
| San Shing Fastech |
Visa and San Shing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and San Shing
The main advantage of trading using opposite Visa and San Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, San Shing 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 San Shing will offset losses from the drop in San Shing's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| San Shing vs. Topco Scientific Co | San Shing vs. WPG Holdings | San Shing vs. Charoen Pokphand Enterprise | San Shing vs. Merida Industry Co |
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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