Correlation Between Visa and Ceres Power
Can any of the company-specific risk be diversified away by investing in both Visa and Ceres Power 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 Ceres Power 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 Ceres Power Holdings, you can compare the effects of market volatilities on Visa and Ceres Power 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 Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ceres Power.
Diversification Opportunities for Visa and Ceres Power
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Ceres is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings 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 Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of Visa i.e., Visa and Ceres Power go up and down completely randomly.
Pair Corralation between Visa and Ceres Power
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.09 times more return on investment than Ceres Power. However, Visa Class A is 11.65 times less risky than Ceres Power. It trades about 0.33 of its potential returns per unit of risk. Ceres Power Holdings is currently generating about -0.26 per unit of risk. If you would invest 34,247 in Visa Class A on December 1, 2024 and sell it today you would earn a total of 2,024 from holding Visa Class A or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Ceres Power Holdings
Performance |
| Timeline |
| Visa Class A |
| Ceres Power Holdings |
Visa and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ceres Power
The main advantage of trading using opposite Visa and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Ceres Power vs. Delta Electronics Public | Ceres Power vs. YASKAWA ELEC UNSP | Ceres Power vs. Plug Power | Ceres Power vs. VERTIV HOLCL A |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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