Correlation Between Visa and Banestes
Can any of the company-specific risk be diversified away by investing in both Visa and Banestes 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 Banestes 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 Banestes SA , you can compare the effects of market volatilities on Visa and Banestes 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 Banestes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Banestes.
Diversification Opportunities for Visa and Banestes
Pay attention - limited upside
The 3 months correlation between Visa and Banestes is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Banestes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banestes 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 Banestes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banestes SA has no effect on the direction of Visa i.e., Visa and Banestes go up and down completely randomly.
Pair Corralation between Visa and Banestes
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.29 times more return on investment than Banestes. However, Visa is 2.29 times more volatile than Banestes SA . It trades about 0.33 of its potential returns per unit of risk. Banestes SA is currently generating about -0.32 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,627 from holding Visa Class A or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Visa Class A vs. Banestes SA
Performance |
| Timeline |
| Visa Class A |
| Banestes SA |
Visa and Banestes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Banestes
The main advantage of trading using opposite Visa and Banestes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Banestes 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 Banestes will offset losses from the drop in Banestes' long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Banestes vs. Banco Santander SA | Banestes vs. Itasa Investimentos | Banestes vs. Banco do Estado | Banestes vs. Banco da Amaznia |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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