Correlation Between Visa and Antec
Can any of the company-specific risk be diversified away by investing in both Visa and Antec 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 Antec 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 Antec Inc, you can compare the effects of market volatilities on Visa and Antec 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 Antec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Antec.
Diversification Opportunities for Visa and Antec
Pay attention - limited upside
The 3 months correlation between Visa and Antec is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Antec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antec Inc 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 Antec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antec Inc has no effect on the direction of Visa i.e., Visa and Antec go up and down completely randomly.
Pair Corralation between Visa and Antec
Taking into account the 90-day investment horizon Visa is expected to generate 3.03 times less return on investment than Antec. But when comparing it to its historical volatility, Visa Class A is 4.56 times less risky than Antec. It trades about 0.08 of its potential returns per unit of risk. Antec Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,652 in Antec Inc on September 1, 2024 and sell it today you would earn a total of 1,408 from holding Antec Inc or generate 85.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.24% |
| Values | Daily Returns |
Visa Class A vs. Antec Inc
Performance |
| Timeline |
| Visa Class A |
| Antec Inc |
Visa and Antec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Antec
The main advantage of trading using opposite Visa and Antec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Antec 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 Antec will offset losses from the drop in Antec's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Antec vs. Mechema Chemicals Int | Antec vs. International CSRC Investment | Antec vs. Cameo Communications | Antec vs. TWOWAY Communications |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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