Correlation Between Visa and Hastings Technology
Can any of the company-specific risk be diversified away by investing in both Visa and Hastings Technology 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 Hastings Technology 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 Hastings Technology Metals, you can compare the effects of market volatilities on Visa and Hastings Technology 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 Hastings Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Hastings Technology.
Diversification Opportunities for Visa and Hastings Technology
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Hastings is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Hastings Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hastings Technology 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 Hastings Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hastings Technology has no effect on the direction of Visa i.e., Visa and Hastings Technology go up and down completely randomly.
Pair Corralation between Visa and Hastings Technology
Taking into account the 90-day investment horizon Visa is expected to generate 6.41 times less return on investment than Hastings Technology. But when comparing it to its historical volatility, Visa Class A is 6.73 times less risky than Hastings Technology. It trades about 0.1 of its potential returns per unit of risk. Hastings Technology Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Hastings Technology Metals on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Hastings Technology Metals or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Visa Class A vs. Hastings Technology Metals
Performance |
| Timeline |
| Visa Class A |
| Hastings Technology |
Visa and Hastings Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Hastings Technology
The main advantage of trading using opposite Visa and Hastings Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Hastings Technology 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 Hastings Technology will offset losses from the drop in Hastings Technology's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Hastings Technology vs. Harmony Gold Mining | Hastings Technology vs. GALENA MINING LTD | Hastings Technology vs. Jacquet Metal Service | Hastings Technology vs. Lion One Metals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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