Correlation Between Visa and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both Visa and Astronics Corp 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 Astronics Corp 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 Astronics Corp Cl, you can compare the effects of market volatilities on Visa and Astronics Corp 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 Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Astronics Corp.
Diversification Opportunities for Visa and Astronics Corp
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Astronics is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl 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 Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of Visa i.e., Visa and Astronics Corp go up and down completely randomly.
Pair Corralation between Visa and Astronics Corp
Taking into account the 90-day investment horizon Visa is expected to generate 1.0 times less return on investment than Astronics Corp. But when comparing it to its historical volatility, Visa Class A is 4.48 times less risky than Astronics Corp. It trades about 0.09 of its potential returns per unit of risk. Astronics Corp Cl is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,656 in Astronics Corp Cl on August 30, 2024 and sell it today you would lose (72.00) from holding Astronics Corp Cl or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Visa Class A vs. Astronics Corp Cl
Performance |
| Timeline |
| Visa Class A |
| Astronics Corp Cl |
Visa and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Astronics Corp
The main advantage of trading using opposite Visa and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Astronics Corp 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 Astronics Corp will offset losses from the drop in Astronics Corp'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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