Correlation Between Visa and Streamwide
Can any of the company-specific risk be diversified away by investing in both Visa and Streamwide 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 Streamwide 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 Streamwide, you can compare the effects of market volatilities on Visa and Streamwide 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 Streamwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Streamwide.
Diversification Opportunities for Visa and Streamwide
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Streamwide is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Streamwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Streamwide 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 Streamwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Streamwide has no effect on the direction of Visa i.e., Visa and Streamwide go up and down completely randomly.
Pair Corralation between Visa and Streamwide
Taking into account the 90-day investment horizon Visa is expected to generate 1.28 times less return on investment than Streamwide. But when comparing it to its historical volatility, Visa Class A is 2.03 times less risky than Streamwide. It trades about 0.08 of its potential returns per unit of risk. Streamwide is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,850 in Streamwide on August 23, 2024 and sell it today you would earn a total of 920.00 from holding Streamwide or generate 49.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.22% |
| Values | Daily Returns |
Visa Class A vs. Streamwide
Performance |
| Timeline |
| Visa Class A |
| Streamwide |
Visa and Streamwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Streamwide
The main advantage of trading using opposite Visa and Streamwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Streamwide 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 Streamwide will offset losses from the drop in Streamwide's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Streamwide vs. Sidetrade | Streamwide vs. Esker SA | Streamwide vs. Xilam Animation | Streamwide vs. Wedia SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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