Correlation Between Visa and Kawan Food
Can any of the company-specific risk be diversified away by investing in both Visa and Kawan Food 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 Kawan Food 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 Kawan Food Bhd, you can compare the effects of market volatilities on Visa and Kawan Food 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 Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kawan Food.
Diversification Opportunities for Visa and Kawan Food
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Kawan is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food 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 Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of Visa i.e., Visa and Kawan Food go up and down completely randomly.
Pair Corralation between Visa and Kawan Food
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.7 times more return on investment than Kawan Food. However, Visa Class A is 1.43 times less risky than Kawan Food. It trades about 0.32 of its potential returns per unit of risk. Kawan Food Bhd is currently generating about 0.06 per unit of risk. If you would invest 33,398 in Visa Class A on November 28, 2024 and sell it today you would earn a total of 1,811 from holding Visa Class A or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Visa Class A vs. Kawan Food Bhd
Performance |
| Timeline |
| Visa Class A |
| Kawan Food Bhd |
Visa and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kawan Food
The main advantage of trading using opposite Visa and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Kawan Food vs. KPJ Healthcare Bhd | Kawan Food vs. EA Technique M | Kawan Food vs. Icon Offshore Bhd | Kawan Food vs. Lyc Healthcare 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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