Correlation Between Visa and Hamilton Global
Can any of the company-specific risk be diversified away by investing in both Visa and Hamilton Global 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 Hamilton Global 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 Hamilton Global Opportunities, you can compare the effects of market volatilities on Visa and Hamilton Global 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 Hamilton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Hamilton Global.
Diversification Opportunities for Visa and Hamilton Global
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Hamilton is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Hamilton Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Global Oppo 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 Hamilton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Global Oppo has no effect on the direction of Visa i.e., Visa and Hamilton Global go up and down completely randomly.
Pair Corralation between Visa and Hamilton Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.77 times more return on investment than Hamilton Global. However, Visa is 2.77 times more volatile than Hamilton Global Opportunities. It trades about 0.1 of its potential returns per unit of risk. Hamilton Global Opportunities is currently generating about -0.09 per unit of risk. If you would invest 26,322 in Visa Class A on November 9, 2024 and sell it today you would earn a total of 8,426 from holding Visa Class A or generate 32.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.8% |
| Values | Daily Returns |
Visa Class A vs. Hamilton Global Opportunities
Performance |
| Timeline |
| Visa Class A |
| Hamilton Global Oppo |
Visa and Hamilton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Hamilton Global
The main advantage of trading using opposite Visa and Hamilton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Hamilton Global 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 Hamilton Global will offset losses from the drop in Hamilton Global's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Hamilton Global vs. Affluent Medical SAS | Hamilton Global vs. NFL Biosciences SAS | Hamilton Global vs. Omer Decugis Cie | Hamilton Global vs. Winfarm |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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