Correlation Between Visa and BRITISH AMERICAN
Can any of the company-specific risk be diversified away by investing in both Visa and BRITISH AMERICAN 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 BRITISH AMERICAN 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 BRITISH AMERICAN TOBACCO, you can compare the effects of market volatilities on Visa and BRITISH AMERICAN 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 BRITISH AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and BRITISH AMERICAN.
Diversification Opportunities for Visa and BRITISH AMERICAN
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and BRITISH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and BRITISH AMERICAN TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRITISH AMERICAN TOBACCO 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 BRITISH AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRITISH AMERICAN TOBACCO has no effect on the direction of Visa i.e., Visa and BRITISH AMERICAN go up and down completely randomly.
Pair Corralation between Visa and BRITISH AMERICAN
If you would invest 21,128 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 10,380 from holding Visa Class A or generate 49.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Visa Class A vs. BRITISH AMERICAN TOBACCO
Performance |
| Timeline |
| Visa Class A |
| BRITISH AMERICAN TOBACCO |
Visa and BRITISH AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and BRITISH AMERICAN
The main advantage of trading using opposite Visa and BRITISH AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, BRITISH AMERICAN 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 BRITISH AMERICAN will offset losses from the drop in BRITISH AMERICAN's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| BRITISH AMERICAN vs. EAST AFRICAN BREWERIES | BRITISH AMERICAN vs. AIRTEL UGANDA LIMITED | BRITISH AMERICAN vs. NATION MEDIA GROUP | BRITISH AMERICAN vs. STANBIC BANK HOLDINGS |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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