Correlation Between Visa and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both Visa and Ashot Ashkelon 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 Ashot Ashkelon 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 Ashot Ashkelon Industries, you can compare the effects of market volatilities on Visa and Ashot Ashkelon 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 Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ashot Ashkelon.
Diversification Opportunities for Visa and Ashot Ashkelon
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Ashot is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries 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 Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Visa i.e., Visa and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between Visa and Ashot Ashkelon
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.33 times more return on investment than Ashot Ashkelon. However, Visa Class A is 3.07 times less risky than Ashot Ashkelon. It trades about 0.35 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about -0.14 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Visa Class A vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| Visa Class A |
| Ashot Ashkelon Industries |
Visa and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ashot Ashkelon
The main advantage of trading using opposite Visa and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Ashot Ashkelon vs. Bet Shemesh Engines | Ashot Ashkelon vs. Elbit Systems | Ashot Ashkelon vs. Bezeq Israeli Telecommunication | Ashot Ashkelon vs. Rekah Pharmaceutical Industry |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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