Correlation Between Visa and Air New
Can any of the company-specific risk be diversified away by investing in both Visa and Air New 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 Air New 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 Air New Zealand, you can compare the effects of market volatilities on Visa and Air New 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 Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Air New.
Diversification Opportunities for Visa and Air New
Very good diversification
The 3 months correlation between Visa and Air is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Visa i.e., Visa and Air New go up and down completely randomly.
Pair Corralation between Visa and Air New
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.03 times more return on investment than Air New. However, Visa is 1.03 times more volatile than Air New Zealand. It trades about 0.34 of its potential returns per unit of risk. Air New Zealand is currently generating about 0.15 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Air New Zealand
Performance |
| Timeline |
| Visa Class A |
| Air New Zealand |
Visa and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Air New
The main advantage of trading using opposite Visa and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Air New vs. Macquarie Group | Air New vs. Macquarie Group Ltd | Air New vs. Commonwealth Bank | Air New vs. Rio Tinto |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |