Correlation Between Visa and Apna Microfinance
Can any of the company-specific risk be diversified away by investing in both Visa and Apna Microfinance 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 Apna Microfinance 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 Apna Microfinance Bank, you can compare the effects of market volatilities on Visa and Apna Microfinance 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 Apna Microfinance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Apna Microfinance.
Diversification Opportunities for Visa and Apna Microfinance
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Apna is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Apna Microfinance Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apna Microfinance Bank 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 Apna Microfinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apna Microfinance Bank has no effect on the direction of Visa i.e., Visa and Apna Microfinance go up and down completely randomly.
Pair Corralation between Visa and Apna Microfinance
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.32 times more return on investment than Apna Microfinance. However, Visa Class A is 3.11 times less risky than Apna Microfinance. It trades about 0.07 of its potential returns per unit of risk. Apna Microfinance Bank is currently generating about -0.16 per unit of risk. If you would invest 27,118 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 4,201 from holding Visa Class A or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.54% |
| Values | Daily Returns |
Visa Class A vs. Apna Microfinance Bank
Performance |
| Timeline |
| Visa Class A |
| Apna Microfinance Bank |
Visa and Apna Microfinance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Apna Microfinance
The main advantage of trading using opposite Visa and Apna Microfinance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Apna Microfinance 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 Apna Microfinance will offset losses from the drop in Apna Microfinance's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Apna Microfinance vs. Orient Rental Modaraba | Apna Microfinance vs. IBL HealthCare | Apna Microfinance vs. Data Agro | Apna Microfinance vs. Pakistan Tobacco |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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