Correlation Between Visa and Alpha Star
Can any of the company-specific risk be diversified away by investing in both Visa and Alpha Star 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 Alpha Star 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 Alpha Star Acquisition, you can compare the effects of market volatilities on Visa and Alpha Star 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 Alpha Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Alpha Star.
Diversification Opportunities for Visa and Alpha Star
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Alpha is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Alpha Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Star Acquisition 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 Alpha Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Star Acquisition has no effect on the direction of Visa i.e., Visa and Alpha Star go up and down completely randomly.
Pair Corralation between Visa and Alpha Star
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.62 times more return on investment than Alpha Star. However, Visa is 2.62 times more volatile than Alpha Star Acquisition. It trades about 0.4 of its potential returns per unit of risk. Alpha Star Acquisition is currently generating about 0.12 per unit of risk. If you would invest 28,134 in Visa Class A on August 30, 2024 and sell it today you would earn a total of 3,336 from holding Visa Class A or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Visa Class A vs. Alpha Star Acquisition
Performance |
| Timeline |
| Visa Class A |
| Alpha Star Acquisition |
Visa and Alpha Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Alpha Star
The main advantage of trading using opposite Visa and Alpha Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Alpha Star 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 Alpha Star will offset losses from the drop in Alpha Star's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Alpha Star vs. A SPAC II | Alpha Star vs. Alpha One | Alpha Star vs. Athena Technology Acquisition | Alpha Star vs. Patria Latin American |
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 .
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |