Correlation Between Visa and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both Visa and CF Bankshares 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 CF Bankshares 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 CF Bankshares, you can compare the effects of market volatilities on Visa and CF Bankshares 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 CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CF Bankshares.
Diversification Opportunities for Visa and CF Bankshares
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Visa and CFBK is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares 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 CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of Visa i.e., Visa and CF Bankshares go up and down completely randomly.
Pair Corralation between Visa and CF Bankshares
Taking into account the 90-day investment horizon Visa is expected to generate 1.03 times less return on investment than CF Bankshares. But when comparing it to its historical volatility, Visa Class A is 2.13 times less risky than CF Bankshares. It trades about 0.37 of its potential returns per unit of risk. CF Bankshares is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,543 in CF Bankshares on August 28, 2024 and sell it today you would earn a total of 257.00 from holding CF Bankshares or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. CF Bankshares
Performance |
| Timeline |
| Visa Class A |
| CF Bankshares |
Visa and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CF Bankshares
The main advantage of trading using opposite Visa and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |