Correlation Between Visa and Black Spade
Can any of the company-specific risk be diversified away by investing in both Visa and Black Spade 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 Black Spade 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 Black Spade Acquisition, you can compare the effects of market volatilities on Visa and Black Spade 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 Black Spade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Black Spade.
Diversification Opportunities for Visa and Black Spade
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Black is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Black Spade Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Spade Acquisition 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 Black Spade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Spade Acquisition has no effect on the direction of Visa i.e., Visa and Black Spade go up and down completely randomly.
Pair Corralation between Visa and Black Spade
Taking into account the 90-day investment horizon Visa Class A is expected to generate 4.11 times more return on investment than Black Spade. However, Visa is 4.11 times more volatile than Black Spade Acquisition. It trades about 0.08 of its potential returns per unit of risk. Black Spade Acquisition is currently generating about 0.08 per unit of risk. If you would invest 22,775 in Visa Class A on October 29, 2024 and sell it today you would earn a total of 10,245 from holding Visa Class A or generate 44.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 21.01% |
| Values | Daily Returns |
Visa Class A vs. Black Spade Acquisition
Performance |
| Timeline |
| Visa Class A |
| Black Spade Acquisition |
Visa and Black Spade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Black Spade
The main advantage of trading using opposite Visa and Black Spade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Black Spade 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 Black Spade will offset losses from the drop in Black Spade's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Black Spade vs. Hurco Companies | Black Spade vs. Coty Inc | Black Spade vs. Parker Hannifin | Black Spade vs. Yuexiu Transport Infrastructure |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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