Correlation Between Visa and Globetronics Tech
Can any of the company-specific risk be diversified away by investing in both Visa and Globetronics Tech 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 Globetronics Tech 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 Globetronics Tech Bhd, you can compare the effects of market volatilities on Visa and Globetronics Tech 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 Globetronics Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Globetronics Tech.
Diversification Opportunities for Visa and Globetronics Tech
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Globetronics is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Globetronics Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globetronics Tech Bhd 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 Globetronics Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globetronics Tech Bhd has no effect on the direction of Visa i.e., Visa and Globetronics Tech go up and down completely randomly.
Pair Corralation between Visa and Globetronics Tech
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.32 times more return on investment than Globetronics Tech. However, Visa Class A is 3.16 times less risky than Globetronics Tech. It trades about 0.09 of its potential returns per unit of risk. Globetronics Tech Bhd is currently generating about -0.03 per unit of risk. If you would invest 20,311 in Visa Class A on September 14, 2024 and sell it today you would earn a total of 11,272 from holding Visa Class A or generate 55.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Visa Class A vs. Globetronics Tech Bhd
Performance |
| Timeline |
| Visa Class A |
| Globetronics Tech Bhd |
Visa and Globetronics Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Globetronics Tech
The main advantage of trading using opposite Visa and Globetronics Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Globetronics Tech 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 Globetronics Tech will offset losses from the drop in Globetronics Tech's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Globetronics Tech vs. Carlsberg Brewery Malaysia | Globetronics Tech vs. Diversified Gateway Solutions | Globetronics Tech vs. Dataprep Holdings Bhd | Globetronics Tech vs. Uchi Technologies Bhd |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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