Correlation Between Visa and CapitaLand Integrated
Can any of the company-specific risk be diversified away by investing in both Visa and CapitaLand Integrated 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 CapitaLand Integrated 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 CapitaLand Integrated Commercial, you can compare the effects of market volatilities on Visa and CapitaLand Integrated 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 CapitaLand Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CapitaLand Integrated.
Diversification Opportunities for Visa and CapitaLand Integrated
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and CapitaLand is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CapitaLand Integrated Commerci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Integrated 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 CapitaLand Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Integrated has no effect on the direction of Visa i.e., Visa and CapitaLand Integrated go up and down completely randomly.
Pair Corralation between Visa and CapitaLand Integrated
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.32 times more return on investment than CapitaLand Integrated. However, Visa Class A is 3.1 times less risky than CapitaLand Integrated. It trades about 0.07 of its potential returns per unit of risk. CapitaLand Integrated Commercial is currently generating about -0.23 per unit of risk. If you would invest 31,101 in Visa Class A on October 7, 2024 and sell it today you would earn a total of 390.00 from holding Visa Class A or generate 1.25% 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. CapitaLand Integrated Commerci
Performance |
| Timeline |
| Visa Class A |
| CapitaLand Integrated |
Visa and CapitaLand Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CapitaLand Integrated
The main advantage of trading using opposite Visa and CapitaLand Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CapitaLand Integrated 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 CapitaLand Integrated will offset losses from the drop in CapitaLand Integrated's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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