Correlation Between Visa and Amundi Physical
Can any of the company-specific risk be diversified away by investing in both Visa and Amundi Physical 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 Amundi Physical 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 Amundi Physical Gold, you can compare the effects of market volatilities on Visa and Amundi Physical 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 Amundi Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amundi Physical.
Diversification Opportunities for Visa and Amundi Physical
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Amundi is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Amundi Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Physical Gold 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 Amundi Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Physical Gold has no effect on the direction of Visa i.e., Visa and Amundi Physical go up and down completely randomly.
Pair Corralation between Visa and Amundi Physical
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.99 times more return on investment than Amundi Physical. However, Visa Class A is 1.01 times less risky than Amundi Physical. It trades about 0.34 of its potential returns per unit of risk. Amundi Physical Gold is currently generating about -0.13 per unit of risk. If you would invest 29,129 in Visa Class A on September 4, 2024 and sell it today you would earn a total of 2,536 from holding Visa Class A or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Amundi Physical Gold
Performance |
| Timeline |
| Visa Class A |
| Amundi Physical Gold |
Visa and Amundi Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amundi Physical
The main advantage of trading using opposite Visa and Amundi Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Amundi Physical 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 Amundi Physical will offset losses from the drop in Amundi Physical's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Amundi Physical vs. Vanguard SP 500 | Amundi Physical vs. SPDR Dow Jones | Amundi Physical vs. iShares Core MSCI | Amundi Physical vs. iShares SP 500 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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