Correlation Between Visa and Cell Impact
Can any of the company-specific risk be diversified away by investing in both Visa and Cell Impact 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 Cell Impact 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 Cell Impact AB, you can compare the effects of market volatilities on Visa and Cell Impact 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 Cell Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Cell Impact.
Diversification Opportunities for Visa and Cell Impact
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Cell is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Cell Impact AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cell Impact AB 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 Cell Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cell Impact AB has no effect on the direction of Visa i.e., Visa and Cell Impact go up and down completely randomly.
Pair Corralation between Visa and Cell Impact
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.11 times more return on investment than Cell Impact. However, Visa Class A is 9.14 times less risky than Cell Impact. It trades about 0.32 of its potential returns per unit of risk. Cell Impact AB is currently generating about 0.03 per unit of risk. If you would invest 33,398 in Visa Class A on November 28, 2024 and sell it today you would earn a total of 1,811 from holding Visa Class A or generate 5.42% 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. Cell Impact AB
Performance |
| Timeline |
| Visa Class A |
| Cell Impact AB |
Visa and Cell Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Cell Impact
The main advantage of trading using opposite Visa and Cell Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Cell Impact 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 Cell Impact will offset losses from the drop in Cell Impact's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Cell Impact vs. Impact Coatings publ | Cell Impact vs. Powercell Sweden | Cell Impact vs. Oncopeptides AB | Cell Impact vs. SaltX Technology Holding |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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