Correlation Between Visa and Anglo American
Can any of the company-specific risk be diversified away by investing in both Visa and Anglo American 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 Anglo American 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 Anglo American Platinum, you can compare the effects of market volatilities on Visa and Anglo American 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 Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Anglo American.
Diversification Opportunities for Visa and Anglo American
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and Anglo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of Visa i.e., Visa and Anglo American go up and down completely randomly.
Pair Corralation between Visa and Anglo American
Taking into account the 90-day investment horizon Visa is expected to generate 1.02 times less return on investment than Anglo American. But when comparing it to its historical volatility, Visa Class A is 4.26 times less risky than Anglo American. It trades about 0.08 of its potential returns per unit of risk. Anglo American Platinum is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,857 in Anglo American Platinum on August 26, 2024 and sell it today you would lose (90.00) from holding Anglo American Platinum or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 74.3% |
| Values | Daily Returns |
Visa Class A vs. Anglo American Platinum
Performance |
| Timeline |
| Visa Class A |
| Anglo American Platinum |
Visa and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Anglo American
The main advantage of trading using opposite Visa and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Anglo American vs. Morningstar Unconstrained Allocation | Anglo American vs. High Yield Municipal Fund | Anglo American vs. Knife River | Anglo American vs. Klckner Co SE |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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