Correlation Between Visa and Calvert Global
Can any of the company-specific risk be diversified away by investing in both Visa and Calvert Global 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 Calvert Global 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 Calvert Global Energy, you can compare the effects of market volatilities on Visa and Calvert Global 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 Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Calvert Global.
Diversification Opportunities for Visa and Calvert Global
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Calvert is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy 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 Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Visa i.e., Visa and Calvert Global go up and down completely randomly.
Pair Corralation between Visa and Calvert Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.08 times more return on investment than Calvert Global. However, Visa is 1.08 times more volatile than Calvert Global Energy. It trades about 0.07 of its potential returns per unit of risk. Calvert Global Energy is currently generating about 0.02 per unit of risk. If you would invest 27,494 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 4,100 from holding Visa Class A or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Calvert Global Energy
Performance |
| Timeline |
| Visa Class A |
| Calvert Global Energy |
Visa and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Calvert Global
The main advantage of trading using opposite Visa and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Calvert Global 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 Calvert Global will offset losses from the drop in Calvert Global's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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