Correlation Between Visa and AIB Group
Can any of the company-specific risk be diversified away by investing in both Visa and AIB 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 AIB 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 AIB Group PLC, you can compare the effects of market volatilities on Visa and AIB 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and AIB Group.
Diversification Opportunities for Visa and AIB Group
Modest diversification
The 3 months correlation between Visa and AIB is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and AIB Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group PLC has no effect on the direction of Visa i.e., Visa and AIB Group go up and down completely randomly.
Pair Corralation between Visa and AIB Group
If you would invest 26,770 in Visa Class A on August 25, 2024 and sell it today you would earn a total of 4,222 from holding Visa Class A or generate 15.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Visa Class A vs. AIB Group PLC
Performance |
| Timeline |
| Visa Class A |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and AIB Group
The main advantage of trading using opposite Visa and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, AIB 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 AIB Group will offset losses from the drop in AIB Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| AIB Group vs. Andover Bancorp | AIB Group vs. Banco del Bajo | AIB Group vs. Aozora Bank Ltd | AIB Group vs. Absa Group Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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