Correlation Between Visa and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Visa and Bridgetown Holdings 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 Bridgetown Holdings 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 Bridgetown Holdings, you can compare the effects of market volatilities on Visa and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Bridgetown Holdings.
Diversification Opportunities for Visa and Bridgetown Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Bridgetown is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Visa i.e., Visa and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Visa and Bridgetown Holdings
If you would invest 28,365 in Visa Class A on October 26, 2024 and sell it today you would earn a total of 3,991 from holding Visa Class A or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.69% |
| Values | Daily Returns |
Visa Class A vs. Bridgetown Holdings
Performance |
| Timeline |
| Visa Class A |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Bridgetown Holdings
The main advantage of trading using opposite Visa and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Bridgetown Holdings vs. Balchem | Bridgetown Holdings vs. Alto Neuroscience, | Bridgetown Holdings vs. Albemarle | Bridgetown Holdings vs. Ecolab Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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