Correlation Between Visa and Kuo Toong
Can any of the company-specific risk be diversified away by investing in both Visa and Kuo Toong 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 Kuo Toong 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 Kuo Toong International, you can compare the effects of market volatilities on Visa and Kuo Toong 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 Kuo Toong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kuo Toong.
Diversification Opportunities for Visa and Kuo Toong
Pay attention - limited upside
The 3 months correlation between Visa and Kuo is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kuo Toong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Toong International 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 Kuo Toong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Toong International has no effect on the direction of Visa i.e., Visa and Kuo Toong go up and down completely randomly.
Pair Corralation between Visa and Kuo Toong
Taking into account the 90-day investment horizon Visa is expected to generate 3.11 times less return on investment than Kuo Toong. But when comparing it to its historical volatility, Visa Class A is 2.01 times less risky than Kuo Toong. It trades about 0.04 of its potential returns per unit of risk. Kuo Toong International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,980 in Kuo Toong International on October 21, 2024 and sell it today you would earn a total of 100.00 from holding Kuo Toong International or generate 2.01% 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. Kuo Toong International
Performance |
| Timeline |
| Visa Class A |
| Kuo Toong International |
Visa and Kuo Toong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kuo Toong
The main advantage of trading using opposite Visa and Kuo Toong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kuo Toong 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 Kuo Toong will offset losses from the drop in Kuo Toong's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Kuo Toong vs. Nankang Rubber Tire | Kuo Toong vs. Rich Development Co | Kuo Toong vs. Kung Sing Engineering | Kuo Toong vs. Advanced Lithium Electrochemistry |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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