Correlation Between Visa and Voya Capital
Can any of the company-specific risk be diversified away by investing in both Visa and Voya Capital 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 Voya Capital 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 Voya Capital Allocation, you can compare the effects of market volatilities on Visa and Voya Capital 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 Voya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Voya Capital.
Diversification Opportunities for Visa and Voya Capital
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Voya is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Voya Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Capital Allocation 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 Voya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Capital Allocation has no effect on the direction of Visa i.e., Visa and Voya Capital go up and down completely randomly.
Pair Corralation between Visa and Voya Capital
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.4 times more return on investment than Voya Capital. However, Visa is 2.4 times more volatile than Voya Capital Allocation. It trades about 0.33 of its potential returns per unit of risk. Voya Capital Allocation is currently generating about 0.19 per unit of risk. If you would invest 29,129 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 2,379 from holding Visa Class A or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Voya Capital Allocation
Performance |
| Timeline |
| Visa Class A |
| Voya Capital Allocation |
Visa and Voya Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Voya Capital
The main advantage of trading using opposite Visa and Voya Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Voya Capital 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 Voya Capital will offset losses from the drop in Voya Capital's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Voya Capital vs. Lind Capital Partners | Voya Capital vs. Nuveen Minnesota Municipal | Voya Capital vs. Federated Pennsylvania Municipal | Voya Capital vs. Ab Impact Municipal |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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