Correlation Between Visa and Emova Group
Can any of the company-specific risk be diversified away by investing in both Visa and Emova 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 Emova 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 Emova Group SA, you can compare the effects of market volatilities on Visa and Emova 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 Emova Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Emova Group.
Diversification Opportunities for Visa and Emova Group
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Emova is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Emova Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emova Group SA 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 Emova Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emova Group SA has no effect on the direction of Visa i.e., Visa and Emova Group go up and down completely randomly.
Pair Corralation between Visa and Emova Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.46 times more return on investment than Emova Group. However, Visa Class A is 2.16 times less risky than Emova Group. It trades about 0.09 of its potential returns per unit of risk. Emova Group SA is currently generating about -0.02 per unit of risk. If you would invest 27,110 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 4,398 from holding Visa Class A or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Visa Class A vs. Emova Group SA
Performance |
| Timeline |
| Visa Class A |
| Emova Group SA |
Visa and Emova Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Emova Group
The main advantage of trading using opposite Visa and Emova Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Emova 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 Emova Group will offset losses from the drop in Emova Group's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Emova Group vs. Claranova SE | Emova Group vs. Nextedia | Emova Group vs. Orapi SA | Emova Group vs. Acheter Louer |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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