Correlation Between Visa and Blackstone Alternative
Can any of the company-specific risk be diversified away by investing in both Visa and Blackstone Alternative 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 Blackstone Alternative 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 Blackstone Alternative Multi Strategy, you can compare the effects of market volatilities on Visa and Blackstone Alternative 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 Blackstone Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Blackstone Alternative.
Diversification Opportunities for Visa and Blackstone Alternative
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Blackstone is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Blackstone Alternative Multi S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Alternative 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 Blackstone Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Alternative has no effect on the direction of Visa i.e., Visa and Blackstone Alternative go up and down completely randomly.
Pair Corralation between Visa and Blackstone Alternative
Taking into account the 90-day investment horizon Visa Class A is expected to generate 5.15 times more return on investment than Blackstone Alternative. However, Visa is 5.15 times more volatile than Blackstone Alternative Multi Strategy. It trades about 0.35 of its potential returns per unit of risk. Blackstone Alternative Multi Strategy is currently generating about 0.15 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Blackstone Alternative Multi S
Performance |
| Timeline |
| Visa Class A |
| Blackstone Alternative |
Visa and Blackstone Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Blackstone Alternative
The main advantage of trading using opposite Visa and Blackstone Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Blackstone Alternative 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 Blackstone Alternative will offset losses from the drop in Blackstone Alternative's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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