Correlation Between Visa and Six Circles
Can any of the company-specific risk be diversified away by investing in both Visa and Six Circles 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 Six Circles 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 Six Circles International, you can compare the effects of market volatilities on Visa and Six Circles 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 Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Six Circles.
Diversification Opportunities for Visa and Six Circles
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Six is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Six Circles International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles International 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 Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles International has no effect on the direction of Visa i.e., Visa and Six Circles go up and down completely randomly.
Pair Corralation between Visa and Six Circles
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.31 times more return on investment than Six Circles. However, Visa is 1.31 times more volatile than Six Circles International. It trades about 0.35 of its potential returns per unit of risk. Six Circles International is currently generating about -0.16 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Six Circles International
Performance |
| Timeline |
| Visa Class A |
| Six Circles International |
Visa and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Six Circles
The main advantage of trading using opposite Visa and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Six Circles vs. Columbia Vertible Securities | Six Circles vs. Harbor Vertible Securities | Six Circles vs. Absolute Convertible Arbitrage | Six Circles vs. Advent Claymore Convertible |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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