Correlation Between Visa and AIRA Factoring
Can any of the company-specific risk be diversified away by investing in both Visa and AIRA Factoring 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 AIRA Factoring 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 AIRA Factoring Public, you can compare the effects of market volatilities on Visa and AIRA Factoring 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 AIRA Factoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and AIRA Factoring.
Diversification Opportunities for Visa and AIRA Factoring
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and AIRA is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and AIRA Factoring Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRA Factoring Public 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 AIRA Factoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRA Factoring Public has no effect on the direction of Visa i.e., Visa and AIRA Factoring go up and down completely randomly.
Pair Corralation between Visa and AIRA Factoring
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.17 times more return on investment than AIRA Factoring. However, Visa Class A is 5.73 times less risky than AIRA Factoring. It trades about 0.33 of its potential returns per unit of risk. AIRA Factoring Public is currently generating about 0.01 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Visa Class A vs. AIRA Factoring Public
Performance |
| Timeline |
| Visa Class A |
| AIRA Factoring Public |
Visa and AIRA Factoring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and AIRA Factoring
The main advantage of trading using opposite Visa and AIRA Factoring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, AIRA Factoring 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 AIRA Factoring will offset losses from the drop in AIRA Factoring's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| AIRA Factoring vs. Amanah Leasing Public | AIRA Factoring vs. Muangthai Capital Public | AIRA Factoring vs. Infraset Public | AIRA Factoring vs. JMT Network Services |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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