Correlation Between Visa and Catena AB
Can any of the company-specific risk be diversified away by investing in both Visa and Catena 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 Catena 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 Catena AB, you can compare the effects of market volatilities on Visa and Catena 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 Catena AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Catena AB.
Diversification Opportunities for Visa and Catena AB
Pay attention - limited upside
The 3 months correlation between Visa and Catena is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena 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 Catena AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena AB has no effect on the direction of Visa i.e., Visa and Catena AB go up and down completely randomly.
Pair Corralation between Visa and Catena AB
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.89 times more return on investment than Catena AB. However, Visa Class A is 1.13 times less risky than Catena AB. It trades about 0.11 of its potential returns per unit of risk. Catena AB is currently generating about -0.05 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Visa Class A vs. Catena AB
Performance |
| Timeline |
| Visa Class A |
| Catena AB |
Visa and Catena AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Catena AB
The main advantage of trading using opposite Visa and Catena AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Catena 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 Catena AB will offset losses from the drop in Catena AB's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Catena AB vs. Fastighets AB Balder | Catena AB vs. Fabege AB | Catena AB vs. Wihlborgs Fastigheter AB | Catena AB vs. AB Sagax |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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