Correlation Between Visa and Agile Group
Can any of the company-specific risk be diversified away by investing in both Visa and Agile 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 Agile 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 Agile Group Holdings, you can compare the effects of market volatilities on Visa and Agile 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 Agile Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Agile Group.
Diversification Opportunities for Visa and Agile Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Agile is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Agile Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Group Holdings 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 Agile Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Group Holdings has no effect on the direction of Visa i.e., Visa and Agile Group go up and down completely randomly.
Pair Corralation between Visa and Agile Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.87 times more return on investment than Agile Group. However, Visa Class A is 1.15 times less risky than Agile Group. It trades about 0.34 of its potential returns per unit of risk. Agile Group Holdings is currently generating about 0.03 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Agile Group Holdings
Performance |
| Timeline |
| Visa Class A |
| Agile Group Holdings |
Visa and Agile Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Agile Group
The main advantage of trading using opposite Visa and Agile Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Agile 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 Agile Group will offset losses from the drop in Agile Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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