Correlation Between Visa and PT Bank
Can any of the company-specific risk be diversified away by investing in both Visa and PT Bank 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 PT Bank 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 PT Bank Bisnis, you can compare the effects of market volatilities on Visa and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PT Bank.
Diversification Opportunities for Visa and PT Bank
Excellent diversification
The 3 months correlation between Visa and BBSI is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PT Bank Bisnis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Bisnis 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Bisnis has no effect on the direction of Visa i.e., Visa and PT Bank go up and down completely randomly.
Pair Corralation between Visa and PT Bank
Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the PT Bank. In addition to that, Visa is 15.19 times more volatile than PT Bank Bisnis. It trades about -0.18 of its total potential returns per unit of risk. PT Bank Bisnis is currently generating about -0.36 per unit of volatility. If you would invest 404,000 in PT Bank Bisnis on January 7, 2025 and sell it today you would lose (3,000) from holding PT Bank Bisnis or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Visa Class A vs. PT Bank Bisnis
Performance |
| Timeline |
| Visa Class A |
| PT Bank Bisnis |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Visa and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PT Bank
The main advantage of trading using opposite Visa and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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