Correlation Between Visa and ASM International
Can any of the company-specific risk be diversified away by investing in both Visa and ASM International 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 ASM International 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 ASM International NV, you can compare the effects of market volatilities on Visa and ASM International 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 ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and ASM International.
Diversification Opportunities for Visa and ASM International
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and ASM is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Visa i.e., Visa and ASM International go up and down completely randomly.
Pair Corralation between Visa and ASM International
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.47 times more return on investment than ASM International. However, Visa Class A is 2.15 times less risky than ASM International. It trades about -0.14 of its potential returns per unit of risk. ASM International NV is currently generating about -0.2 per unit of risk. If you would invest 34,744 in Visa Class A on January 8, 2025 and sell it today you would lose (3,431) from holding Visa Class A or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Visa Class A vs. ASM International NV
Performance |
| Timeline |
| Visa Class A |
| ASM International |
Visa and ASM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and ASM International
The main advantage of trading using opposite Visa and ASM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, ASM International 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 ASM International will offset losses from the drop in ASM International's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| ASM International vs. Camtek | ASM International vs. Onto Innovation | ASM International vs. Amtech Systems | ASM International vs. Veeco Instruments |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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