Correlation Between Visa and CLOAK
Can any of the company-specific risk be diversified away by investing in both Visa and CLOAK 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 CLOAK 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 CLOAK, you can compare the effects of market volatilities on Visa and CLOAK 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 CLOAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CLOAK.
Diversification Opportunities for Visa and CLOAK
Pay attention - limited upside
The 3 months correlation between Visa and CLOAK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CLOAK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOAK 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 CLOAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLOAK has no effect on the direction of Visa i.e., Visa and CLOAK go up and down completely randomly.
Pair Corralation between Visa and CLOAK
If you would invest 27,801 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 3,669 from holding Visa Class A or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Visa Class A vs. CLOAK
Performance |
| Timeline |
| Visa Class A |
| CLOAK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and CLOAK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CLOAK
The main advantage of trading using opposite Visa and CLOAK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CLOAK 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 CLOAK will offset losses from the drop in CLOAK's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart 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 Positions Ratings module to 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.
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