Correlation Between Visa and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both Visa and BB Seguridade 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 BB Seguridade 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 BB Seguridade Participacoes, you can compare the effects of market volatilities on Visa and BB Seguridade 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 BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and BB Seguridade.
Diversification Opportunities for Visa and BB Seguridade
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and BBSE3 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic 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 BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Visa i.e., Visa and BB Seguridade go up and down completely randomly.
Pair Corralation between Visa and BB Seguridade
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.05 times more return on investment than BB Seguridade. However, Visa is 1.05 times more volatile than BB Seguridade Participacoes. It trades about 0.33 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about -0.14 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 | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Visa Class A vs. BB Seguridade Participacoes
Performance |
| Timeline |
| Visa Class A |
| BB Seguridade Partic |
Visa and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and BB Seguridade
The main advantage of trading using opposite Visa and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| BB Seguridade vs. Banco Bradesco SA | BB Seguridade vs. Petrleo Brasileiro SA | BB Seguridade vs. Ita Unibanco Holding | BB Seguridade vs. Itasa Investimentos |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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