Correlation Between Visa and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Visa and NV Bekaert 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 NV Bekaert 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 NV Bekaert SA, you can compare the effects of market volatilities on Visa and NV Bekaert 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 NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NV Bekaert.
Diversification Opportunities for Visa and NV Bekaert
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and BEKB is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert 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 NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Visa i.e., Visa and NV Bekaert go up and down completely randomly.
Pair Corralation between Visa and NV Bekaert
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.81 times more return on investment than NV Bekaert. However, Visa Class A is 1.23 times less risky than NV Bekaert. It trades about 0.17 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.1 per unit of risk. If you would invest 26,058 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 4,934 from holding Visa Class A or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.84% |
| Values | Daily Returns |
Visa Class A vs. NV Bekaert SA
Performance |
| Timeline |
| Visa Class A |
| NV Bekaert SA |
Visa and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NV Bekaert
The main advantage of trading using opposite Visa and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| NV Bekaert vs. Solvay SA | NV Bekaert vs. Ackermans Van Haaren | NV Bekaert vs. Barco NV | NV Bekaert vs. Etablissementen Franz Colruyt |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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