Correlation Between Visa and Bank Central
Can any of the company-specific risk be diversified away by investing in both Visa and Bank Central 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 Bank Central 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 Bank Central Asia, you can compare the effects of market volatilities on Visa and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Bank Central.
Diversification Opportunities for Visa and Bank Central
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Bank is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Visa i.e., Visa and Bank Central go up and down completely randomly.
Pair Corralation between Visa and Bank Central
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.84 times more return on investment than Bank Central. However, Visa Class A is 1.19 times less risky than Bank Central. It trades about 0.33 of its potential returns per unit of risk. Bank Central Asia is currently generating about -0.1 per unit of risk. If you would invest 28,960 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 2,510 from holding Visa Class A or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Bank Central Asia
Performance |
| Timeline |
| Visa Class A |
| Bank Central Asia |
Visa and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Bank Central
The main advantage of trading using opposite Visa and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |