Correlation Between Visa and Logista
Can any of the company-specific risk be diversified away by investing in both Visa and Logista 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 Logista 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 Logista, you can compare the effects of market volatilities on Visa and Logista 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 Logista. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Logista.
Diversification Opportunities for Visa and Logista
Almost no diversification
The 3 months correlation between Visa and Logista is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Logista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logista 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 Logista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logista has no effect on the direction of Visa i.e., Visa and Logista go up and down completely randomly.
Pair Corralation between Visa and Logista
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.38 times more return on investment than Logista. However, Visa is 1.38 times more volatile than Logista. It trades about 0.1 of its potential returns per unit of risk. Logista is currently generating about 0.13 per unit of risk. If you would invest 27,139 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 4,331 from holding Visa Class A or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Visa Class A vs. Logista
Performance |
| Timeline |
| Visa Class A |
| Logista |
Visa and Logista Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Logista
The main advantage of trading using opposite Visa and Logista positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Logista 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 Logista will offset losses from the drop in Logista's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Logista vs. Austevoll Seafood ASA | Logista vs. Canadian Utilities Limited | Logista vs. Methode Electronics | Logista vs. Nucletron Electronic Aktiengesellschaft |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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