Correlation Between Visa and CEC AFRICA
Can any of the company-specific risk be diversified away by investing in both Visa and CEC AFRICA 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 CEC AFRICA 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 CEC AFRICA INVESTMENTS, you can compare the effects of market volatilities on Visa and CEC AFRICA 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 CEC AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CEC AFRICA.
Diversification Opportunities for Visa and CEC AFRICA
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and CEC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CEC AFRICA INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEC AFRICA INVESTMENTS 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 CEC AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEC AFRICA INVESTMENTS has no effect on the direction of Visa i.e., Visa and CEC AFRICA go up and down completely randomly.
Pair Corralation between Visa and CEC AFRICA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 3.52 times more return on investment than CEC AFRICA. However, Visa is 3.52 times more volatile than CEC AFRICA INVESTMENTS. It trades about 0.33 of its potential returns per unit of risk. CEC AFRICA INVESTMENTS is currently generating about -0.21 per unit of risk. If you would invest 28,960 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 2,510 from holding Visa Class A or generate 8.67% 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. CEC AFRICA INVESTMENTS
Performance |
| Timeline |
| Visa Class A |
| CEC AFRICA INVESTMENTS |
Visa and CEC AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CEC AFRICA
The main advantage of trading using opposite Visa and CEC AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CEC AFRICA 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 CEC AFRICA will offset losses from the drop in CEC AFRICA's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| CEC AFRICA vs. STANDARD CHARTERED BANK | CEC AFRICA vs. AECI MINING EXPLOSIVES | CEC AFRICA vs. ZAMBIA SUGAR PLC | CEC AFRICA vs. BRITISH AMERICAN TOBACCO ZAMBIA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |