Correlation Between Visa and China Railway
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By analyzing existing cross correlation between Visa Class A and China Railway Construction, you can compare the effects of market volatilities on Visa and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and China Railway.
Diversification Opportunities for Visa and China Railway
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Visa i.e., Visa and China Railway go up and down completely randomly.
Pair Corralation between Visa and China Railway
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.43 times more return on investment than China Railway. However, Visa Class A is 2.32 times less risky than China Railway. It trades about 0.37 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.0 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. China Railway Construction
Performance |
| Timeline |
| Visa Class A |
| China Railway Constr |
Visa and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and China Railway
The main advantage of trading using opposite Visa and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| China Railway vs. Chengtun Mining Group | China Railway vs. Shengda Mining Co | China Railway vs. Juewei Food Co | China Railway vs. Guangdong Jingyi Metal |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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