Correlation Between Visa and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Visa and Barry Callebaut 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 Barry Callebaut 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 Barry Callebaut AG, you can compare the effects of market volatilities on Visa and Barry Callebaut 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 Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Barry Callebaut.
Diversification Opportunities for Visa and Barry Callebaut
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Barry is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG 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 Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Visa i.e., Visa and Barry Callebaut go up and down completely randomly.
Pair Corralation between Visa and Barry Callebaut
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.37 times more return on investment than Barry Callebaut. However, Visa Class A is 2.67 times less risky than Barry Callebaut. It trades about 0.24 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.14 per unit of risk. If you would invest 28,014 in Visa Class A on September 13, 2024 and sell it today you would earn a total of 3,526 from holding Visa Class A or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Barry Callebaut AG
Performance |
| Timeline |
| Visa Class A |
| Barry Callebaut AG |
Visa and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Barry Callebaut
The main advantage of trading using opposite Visa and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Barry Callebaut 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 Barry Callebaut will offset losses from the drop in Barry Callebaut'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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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