Correlation Between Visa and Careium AB
Can any of the company-specific risk be diversified away by investing in both Visa and Careium AB 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 Careium AB 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 Careium AB, you can compare the effects of market volatilities on Visa and Careium AB 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 Careium AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Careium AB.
Diversification Opportunities for Visa and Careium AB
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Careium is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Careium AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Careium AB 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 Careium AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Careium AB has no effect on the direction of Visa i.e., Visa and Careium AB go up and down completely randomly.
Pair Corralation between Visa and Careium AB
Taking into account the 90-day investment horizon Visa is expected to generate 1.23 times less return on investment than Careium AB. But when comparing it to its historical volatility, Visa Class A is 2.5 times less risky than Careium AB. It trades about 0.08 of its potential returns per unit of risk. Careium AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,460 in Careium AB on September 14, 2024 and sell it today you would earn a total of 490.00 from holding Careium AB or generate 19.92% 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. Careium AB
Performance |
| Timeline |
| Visa Class A |
| Careium AB |
Visa and Careium AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Careium AB
The main advantage of trading using opposite Visa and Careium AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Careium AB 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 Careium AB will offset losses from the drop in Careium AB's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Careium AB vs. Humble Group AB | Careium AB vs. Enad Global 7 | Careium AB vs. Goodbye Kansas Group | Careium AB vs. KABE Group AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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