Correlation Between Visa and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Visa and Sterling Capital 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 Sterling Capital 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 Sterling Capital Intermediate, you can compare the effects of market volatilities on Visa and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sterling Capital.
Diversification Opportunities for Visa and Sterling Capital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Sterling is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Int has no effect on the direction of Visa i.e., Visa and Sterling Capital go up and down completely randomly.
Pair Corralation between Visa and Sterling Capital
Taking into account the 90-day investment horizon Visa Class A is expected to generate 4.55 times more return on investment than Sterling Capital. However, Visa is 4.55 times more volatile than Sterling Capital Intermediate. It trades about 0.35 of its potential returns per unit of risk. Sterling Capital Intermediate is currently generating about 0.12 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Sterling Capital Intermediate
Performance |
| Timeline |
| Visa Class A |
| Sterling Capital Int |
Visa and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Sterling Capital
The main advantage of trading using opposite Visa and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Transaction History View history of all your transactions and understand their impact on performance |