Correlation Between Visa and Actic Group
Can any of the company-specific risk be diversified away by investing in both Visa and Actic Group 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 Actic Group 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 Actic Group AB, you can compare the effects of market volatilities on Visa and Actic Group 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 Actic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Actic Group.
Diversification Opportunities for Visa and Actic Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Actic is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Actic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actic Group AB 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 Actic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actic Group AB has no effect on the direction of Visa i.e., Visa and Actic Group go up and down completely randomly.
Pair Corralation between Visa and Actic Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate about the same return on investment as Actic Group AB. But, Visa Class A is 4.41 times less risky than Actic Group. It trades about 0.09 of its potential returns per unit of risk. Actic Group AB is currently generating about 0.02 per unit of risk. If you would invest 630.00 in Actic Group AB on September 3, 2024 and sell it today you would lose (30.00) from holding Actic Group AB or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Visa Class A vs. Actic Group AB
Performance |
| Timeline |
| Visa Class A |
| Actic Group AB |
Visa and Actic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Actic Group
The main advantage of trading using opposite Visa and Actic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Actic Group 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 Actic Group will offset losses from the drop in Actic Group's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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