Correlation Between Visa and Betashares Asia
Can any of the company-specific risk be diversified away by investing in both Visa and Betashares Asia 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 Betashares Asia 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 Betashares Asia Technology, you can compare the effects of market volatilities on Visa and Betashares Asia 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 Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Betashares Asia.
Diversification Opportunities for Visa and Betashares Asia
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Betashares is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech 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 Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of Visa i.e., Visa and Betashares Asia go up and down completely randomly.
Pair Corralation between Visa and Betashares Asia
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.87 times more return on investment than Betashares Asia. However, Visa Class A is 1.15 times less risky than Betashares Asia. It trades about 0.18 of its potential returns per unit of risk. Betashares Asia Technology is currently generating about 0.15 per unit of risk. If you would invest 27,801 in Visa Class A on November 2, 2024 and sell it today you would earn a total of 6,504 from holding Visa Class A or generate 23.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Visa Class A vs. Betashares Asia Technology
Performance |
| Timeline |
| Visa Class A |
| Betashares Asia Tech |
Visa and Betashares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Betashares Asia
The main advantage of trading using opposite Visa and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Betashares Asia 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 Betashares Asia will offset losses from the drop in Betashares Asia'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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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