Correlation Between Visa and PGF Capital
Can any of the company-specific risk be diversified away by investing in both Visa and PGF Capital 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 PGF Capital 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 PGF Capital Bhd, you can compare the effects of market volatilities on Visa and PGF Capital 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 PGF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PGF Capital.
Diversification Opportunities for Visa and PGF Capital
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and PGF is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PGF Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGF Capital 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 PGF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGF Capital Bhd has no effect on the direction of Visa i.e., Visa and PGF Capital go up and down completely randomly.
Pair Corralation between Visa and PGF Capital
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.47 times more return on investment than PGF Capital. However, Visa Class A is 2.12 times less risky than PGF Capital. It trades about 0.35 of its potential returns per unit of risk. PGF Capital Bhd is currently generating about -0.06 per unit of risk. If you would invest 29,129 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 2,536 from holding Visa Class A or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. PGF Capital Bhd
Performance |
| Timeline |
| Visa Class A |
| PGF Capital Bhd |
Visa and PGF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PGF Capital
The main advantage of trading using opposite Visa and PGF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PGF Capital 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 PGF Capital will offset losses from the drop in PGF Capital's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| PGF Capital vs. Malayan Banking Bhd | PGF Capital vs. Public Bank Bhd | PGF Capital vs. Petronas Chemicals Group | PGF Capital vs. Tenaga Nasional 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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