Correlation Between Visa and Admiral Group
Can any of the company-specific risk be diversified away by investing in both Visa and Admiral Group 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 Admiral Group 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 Admiral Group PLC, you can compare the effects of market volatilities on Visa and Admiral Group 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 Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Admiral Group.
Diversification Opportunities for Visa and Admiral Group
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Admiral is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC 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 Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of Visa i.e., Visa and Admiral Group go up and down completely randomly.
Pair Corralation between Visa and Admiral Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.94 times more return on investment than Admiral Group. However, Visa Class A is 1.07 times less risky than Admiral Group. It trades about 0.11 of its potential returns per unit of risk. Admiral Group PLC is currently generating about -0.02 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
Visa Class A vs. Admiral Group PLC
Performance |
| Timeline |
| Visa Class A |
| Admiral Group PLC |
Visa and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Admiral Group
The main advantage of trading using opposite Visa and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Admiral Group 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Admiral Group vs. Southern Copper Corp | Admiral Group vs. Wheaton Precious Metals | Admiral Group vs. Jacquet Metal Service | Admiral Group vs. Allianz Technology Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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