Correlation Between Visa and Ebix
Can any of the company-specific risk be diversified away by investing in both Visa and Ebix 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 Ebix 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 Ebix Inc, you can compare the effects of market volatilities on Visa and Ebix 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 Ebix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ebix.
Diversification Opportunities for Visa and Ebix
Very poor diversification
The 3 months correlation between Visa and Ebix is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ebix Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebix Inc 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 Ebix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebix Inc has no effect on the direction of Visa i.e., Visa and Ebix go up and down completely randomly.
Pair Corralation between Visa and Ebix
Taking into account the 90-day investment horizon Visa is expected to generate 3.5 times less return on investment than Ebix. But when comparing it to its historical volatility, Visa Class A is 4.48 times less risky than Ebix. It trades about 0.09 of its potential returns per unit of risk. Ebix Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,953 in Ebix Inc on September 12, 2024 and sell it today you would earn a total of 767.00 from holding Ebix Inc or generate 39.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 29.49% |
| Values | Daily Returns |
Visa Class A vs. Ebix Inc
Performance |
| Timeline |
| Visa Class A |
| Ebix Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Ebix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ebix
The main advantage of trading using opposite Visa and Ebix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ebix 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 Ebix will offset losses from the drop in Ebix's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |