Correlation Between Visa and AXA SA
Can any of the company-specific risk be diversified away by investing in both Visa and AXA SA 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 AXA SA 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 AXA SA, you can compare the effects of market volatilities on Visa and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and AXA SA.
Diversification Opportunities for Visa and AXA SA
Pay attention - limited upside
The 3 months correlation between Visa and AXA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Visa i.e., Visa and AXA SA go up and down completely randomly.
Pair Corralation between Visa and AXA SA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.22 times more return on investment than AXA SA. However, Visa is 2.22 times more volatile than AXA SA. It trades about 0.08 of its potential returns per unit of risk. AXA SA is currently generating about 0.06 per unit of risk. If you would invest 25,801 in Visa Class A on September 14, 2024 and sell it today you would earn a total of 5,782 from holding Visa Class A or generate 22.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Visa Class A vs. AXA SA
Performance |
| Timeline |
| Visa Class A |
| AXA SA |
Visa and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and AXA SA
The main advantage of trading using opposite Visa and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| AXA SA vs. Taiwan Semiconductor Manufacturing | AXA SA vs. Monster Beverage Corp | AXA SA vs. First Republic Bank | AXA SA vs. Verizon Communications |
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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