Correlation Between Visa and CK Asset
Can any of the company-specific risk be diversified away by investing in both Visa and CK Asset 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 CK Asset 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 CK Asset Holdings, you can compare the effects of market volatilities on Visa and CK Asset 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 CK Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CK Asset.
Diversification Opportunities for Visa and CK Asset
Very good diversification
The 3 months correlation between Visa and CHKGF is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CK Asset Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Asset 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 CK Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Asset Holdings has no effect on the direction of Visa i.e., Visa and CK Asset go up and down completely randomly.
Pair Corralation between Visa and CK Asset
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.29 times more return on investment than CK Asset. However, Visa Class A is 3.5 times less risky than CK Asset. It trades about 0.08 of its potential returns per unit of risk. CK Asset Holdings is currently generating about -0.03 per unit of risk. If you would invest 22,910 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 8,272 from holding Visa Class A or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.27% |
| Values | Daily Returns |
Visa Class A vs. CK Asset Holdings
Performance |
| Timeline |
| Visa Class A |
| CK Asset Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Visa and CK Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CK Asset
The main advantage of trading using opposite Visa and CK Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CK Asset 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 CK Asset will offset losses from the drop in CK Asset's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| CK Asset vs. Hong Kong Land | CK Asset vs. Sino Land Co | CK Asset vs. CK Hutchison Holdings | CK Asset vs. CK Hutchison 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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