Correlation Between Visa and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Visa and Credit Suisse 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 Credit Suisse 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 Credit Suisse Floating, you can compare the effects of market volatilities on Visa and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Credit Suisse.
Diversification Opportunities for Visa and Credit Suisse
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Credit is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Floating has no effect on the direction of Visa i.e., Visa and Credit Suisse go up and down completely randomly.
Pair Corralation between Visa and Credit Suisse
Taking into account the 90-day investment horizon Visa Class A is expected to generate 5.59 times more return on investment than Credit Suisse. However, Visa is 5.59 times more volatile than Credit Suisse Floating. It trades about 0.09 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.21 per unit of risk. If you would invest 22,256 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 8,736 from holding Visa Class A or generate 39.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Credit Suisse Floating
Performance |
| Timeline |
| Visa Class A |
| Credit Suisse Floating |
Visa and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Credit Suisse
The main advantage of trading using opposite Visa and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Credit Suisse vs. Credit Suisse Floating | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Modity | Credit Suisse vs. Credit Suisse Managed |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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