Correlation Between Visa and China Natural
Can any of the company-specific risk be diversified away by investing in both Visa and China Natural 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 China Natural 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 China Natural Resources, you can compare the effects of market volatilities on Visa and China Natural 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 China Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and China Natural.
Diversification Opportunities for Visa and China Natural
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and China is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and China Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Natural Resources 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 China Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Natural Resources has no effect on the direction of Visa i.e., Visa and China Natural go up and down completely randomly.
Pair Corralation between Visa and China Natural
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.38 times more return on investment than China Natural. However, Visa Class A is 2.66 times less risky than China Natural. It trades about 0.32 of its potential returns per unit of risk. China Natural Resources is currently generating about -0.15 per unit of risk. If you would invest 28,322 in Visa Class A on August 24, 2024 and sell it today you would earn a total of 2,668 from holding Visa Class A or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. China Natural Resources
Performance |
| Timeline |
| Visa Class A |
| China Natural Resources |
Visa and China Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and China Natural
The main advantage of trading using opposite Visa and China Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, China Natural 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 China Natural will offset losses from the drop in China Natural's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| China Natural vs. Seychelle Environmtl | China Natural vs. Vow ASA | China Natural vs. Eestech | China Natural vs. Energy and Water |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |