Correlation Between Visa and Crestwood Equity
Can any of the company-specific risk be diversified away by investing in both Visa and Crestwood Equity 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 Crestwood Equity 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 Crestwood Equity Partners, you can compare the effects of market volatilities on Visa and Crestwood Equity 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 Crestwood Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Crestwood Equity.
Diversification Opportunities for Visa and Crestwood Equity
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Crestwood is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Crestwood Equity Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crestwood Equity Partners 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 Crestwood Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crestwood Equity Partners has no effect on the direction of Visa i.e., Visa and Crestwood Equity go up and down completely randomly.
Pair Corralation between Visa and Crestwood Equity
If you would invest 27,118 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 4,201 from holding Visa Class A or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.48% |
| Values | Daily Returns |
Visa Class A vs. Crestwood Equity Partners
Performance |
| Timeline |
| Visa Class A |
| Crestwood Equity Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Crestwood Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Crestwood Equity
The main advantage of trading using opposite Visa and Crestwood Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Crestwood Equity 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 Crestwood Equity will offset losses from the drop in Crestwood Equity's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Crestwood Equity vs. Western Midstream Partners | Crestwood Equity vs. DT Midstream | Crestwood Equity vs. MPLX LP | Crestwood Equity vs. Enterprise Products Partners |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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