Correlation Between Visa and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Visa and Emerging Markets 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 Emerging Markets 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 Emerging Markets Sustainability, you can compare the effects of market volatilities on Visa and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Emerging Markets.
Diversification Opportunities for Visa and Emerging Markets
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Emerging is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Emerging Markets Sustainabilit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Sus 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Sus has no effect on the direction of Visa i.e., Visa and Emerging Markets go up and down completely randomly.
Pair Corralation between Visa and Emerging Markets
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.18 times more return on investment than Emerging Markets. However, Visa is 1.18 times more volatile than Emerging Markets Sustainability. It trades about 0.08 of its potential returns per unit of risk. Emerging Markets Sustainability is currently generating about -0.04 per unit of risk. If you would invest 31,032 in Visa Class A on September 12, 2024 and sell it today you would earn a total of 373.50 from holding Visa Class A or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Emerging Markets Sustainabilit
Performance |
| Timeline |
| Visa Class A |
| Emerging Markets Sus |
Visa and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Emerging Markets
The main advantage of trading using opposite Visa and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Emerging Markets vs. Dfa Intl Sustainability | Emerging Markets vs. Dfa Sustainability Core | Emerging Markets vs. Dfa Investment Dimensions | Emerging Markets vs. Dfa Sustainability Targeted |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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