Correlation Between Visa and Borgestad
Can any of the company-specific risk be diversified away by investing in both Visa and Borgestad 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 Borgestad 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 Borgestad A, you can compare the effects of market volatilities on Visa and Borgestad 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 Borgestad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Borgestad.
Diversification Opportunities for Visa and Borgestad
Weak diversification
The 3 months correlation between Visa and Borgestad is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Borgestad A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borgestad A 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 Borgestad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borgestad A has no effect on the direction of Visa i.e., Visa and Borgestad go up and down completely randomly.
Pair Corralation between Visa and Borgestad
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.3 times more return on investment than Borgestad. However, Visa Class A is 3.36 times less risky than Borgestad. It trades about 0.05 of its potential returns per unit of risk. Borgestad A is currently generating about -0.01 per unit of risk. If you would invest 31,722 in Visa Class A on October 23, 2024 and sell it today you would earn a total of 240.00 from holding Visa Class A or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Visa Class A vs. Borgestad A
Performance |
| Timeline |
| Visa Class A |
| Borgestad A |
Visa and Borgestad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Borgestad
The main advantage of trading using opposite Visa and Borgestad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Borgestad 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 Borgestad will offset losses from the drop in Borgestad's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Borgestad vs. Goodtech | Borgestad vs. Havila Shipping ASA | Borgestad vs. Eidesvik Offshore ASA | Borgestad vs. Byggma |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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