Correlation Between Visa and BE Group
Can any of the company-specific risk be diversified away by investing in both Visa and BE Group 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 BE Group 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 BE Group AB, you can compare the effects of market volatilities on Visa and BE Group 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 BE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and BE Group.
Diversification Opportunities for Visa and BE Group
Pay attention - limited upside
The 3 months correlation between Visa and BEGR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and BE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Group AB 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 BE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Group AB has no effect on the direction of Visa i.e., Visa and BE Group go up and down completely randomly.
Pair Corralation between Visa and BE Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.88 times more return on investment than BE Group. However, Visa Class A is 1.13 times less risky than BE Group. It trades about 0.19 of its potential returns per unit of risk. BE Group AB is currently generating about -0.09 per unit of risk. If you would invest 26,867 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 4,452 from holding Visa Class A or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Visa Class A vs. BE Group AB
Performance |
| Timeline |
| Visa Class A |
| BE Group AB |
Visa and BE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and BE Group
The main advantage of trading using opposite Visa and BE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, BE Group 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 BE Group will offset losses from the drop in BE Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| BE Group vs. Addtech AB | BE Group vs. Teqnion AB | BE Group vs. Vitec Software Group | BE Group vs. Lagercrantz Group AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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