Correlation Between Visa and American Rebel
Can any of the company-specific risk be diversified away by investing in both Visa and American Rebel 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 American Rebel 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 American Rebel Holdings, you can compare the effects of market volatilities on Visa and American Rebel 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 American Rebel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and American Rebel.
Diversification Opportunities for Visa and American Rebel
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and American Rebel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Rebel Holdings 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 American Rebel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Rebel Holdings has no effect on the direction of Visa i.e., Visa and American Rebel go up and down completely randomly.
Pair Corralation between Visa and American Rebel
Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the American Rebel. But the stock apears to be less risky and, when comparing its historical volatility, Visa Class A is 22.94 times less risky than American Rebel. The stock trades about -0.13 of its potential returns per unit of risk. The American Rebel Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.32 in American Rebel Holdings on December 23, 2024 and sell it today you would lose (0.28) from holding American Rebel Holdings or give up 21.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Visa Class A vs. American Rebel Holdings
Performance |
| Timeline |
| Visa Class A |
| American Rebel Holdings |
Risk-Adjusted Performance
OK
Weak | Strong |
Visa and American Rebel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and American Rebel
The main advantage of trading using opposite Visa and American Rebel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, American Rebel 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 American Rebel will offset losses from the drop in American Rebel's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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