Correlation Between Visa and SCG PACKAGING
Can any of the company-specific risk be diversified away by investing in both Visa and SCG PACKAGING 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 SCG PACKAGING 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 SCG PACKAGING FGN , you can compare the effects of market volatilities on Visa and SCG PACKAGING 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 SCG PACKAGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and SCG PACKAGING.
Diversification Opportunities for Visa and SCG PACKAGING
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and SCG is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and SCG PACKAGING FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG PACKAGING FGN 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 SCG PACKAGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG PACKAGING FGN has no effect on the direction of Visa i.e., Visa and SCG PACKAGING go up and down completely randomly.
Pair Corralation between Visa and SCG PACKAGING
Taking into account the 90-day investment horizon Visa is expected to generate 3.18 times less return on investment than SCG PACKAGING. But when comparing it to its historical volatility, Visa Class A is 5.48 times less risky than SCG PACKAGING. It trades about 0.09 of its potential returns per unit of risk. SCG PACKAGING FGN is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 38.00 in SCG PACKAGING FGN on September 2, 2024 and sell it today you would earn a total of 20.00 from holding SCG PACKAGING FGN or generate 52.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Visa Class A vs. SCG PACKAGING FGN
Performance |
| Timeline |
| Visa Class A |
| SCG PACKAGING FGN |
Visa and SCG PACKAGING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and SCG PACKAGING
The main advantage of trading using opposite Visa and SCG PACKAGING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, SCG PACKAGING 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 SCG PACKAGING will offset losses from the drop in SCG PACKAGING's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| SCG PACKAGING vs. Packaging of | SCG PACKAGING vs. Smurfit Kappa Group | SCG PACKAGING vs. Superior Plus Corp | SCG PACKAGING vs. Origin Agritech |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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