Correlation Between Visa and Artea SA
Can any of the company-specific risk be diversified away by investing in both Visa and Artea SA 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 Artea SA 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 Artea SA, you can compare the effects of market volatilities on Visa and Artea SA 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 Artea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Artea SA.
Diversification Opportunities for Visa and Artea SA
Very good diversification
The 3 months correlation between Visa and Artea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Artea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artea SA 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 Artea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artea SA has no effect on the direction of Visa i.e., Visa and Artea SA go up and down completely randomly.
Pair Corralation between Visa and Artea SA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.59 times more return on investment than Artea SA. However, Visa Class A is 1.69 times less risky than Artea SA. It trades about 0.11 of its potential returns per unit of risk. Artea SA is currently generating about -0.1 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
Visa Class A vs. Artea SA
Performance |
| Timeline |
| Visa Class A |
| Artea SA |
Visa and Artea SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Artea SA
The main advantage of trading using opposite Visa and Artea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Artea SA 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 Artea SA will offset losses from the drop in Artea SA'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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