Correlation Between Visa and FDO INV
Can any of the company-specific risk be diversified away by investing in both Visa and FDO INV 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 FDO INV 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 FDO INV IMOB, you can compare the effects of market volatilities on Visa and FDO INV 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 FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and FDO INV.
Diversification Opportunities for Visa and FDO INV
Excellent diversification
The 3 months correlation between Visa and FDO is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and FDO INV IMOB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV IMOB 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 FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV IMOB has no effect on the direction of Visa i.e., Visa and FDO INV go up and down completely randomly.
Pair Corralation between Visa and FDO INV
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.24 times more return on investment than FDO INV. However, Visa is 1.24 times more volatile than FDO INV IMOB. It trades about 0.34 of its potential returns per unit of risk. FDO INV IMOB is currently generating about -0.01 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. FDO INV IMOB
Performance |
| Timeline |
| Visa Class A |
| FDO INV IMOB |
Visa and FDO INV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and FDO INV
The main advantage of trading using opposite Visa and FDO INV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, FDO INV 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 FDO INV will offset losses from the drop in FDO INV'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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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