Correlation Between Visa and CF Acquisition
Can any of the company-specific risk be diversified away by investing in both Visa and CF Acquisition 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 Acquisition 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 Acquisition Corp, you can compare the effects of market volatilities on Visa and CF Acquisition 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 Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CF Acquisition.
Diversification Opportunities for Visa and CF Acquisition
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and CFIVU is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CF Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Acquisition Corp 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 Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Acquisition Corp has no effect on the direction of Visa i.e., Visa and CF Acquisition go up and down completely randomly.
Pair Corralation between Visa and CF Acquisition
If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Visa Class A vs. CF Acquisition Corp
Performance |
| Timeline |
| Visa Class A |
| CF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and CF Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CF Acquisition
The main advantage of trading using opposite Visa and CF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CF Acquisition 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 Acquisition will offset losses from the drop in CF Acquisition's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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