Correlation Between Visa and Fastighetsbolaget
Can any of the company-specific risk be diversified away by investing in both Visa and Fastighetsbolaget 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 Fastighetsbolaget 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 Fastighetsbolaget Emilshus AB, you can compare the effects of market volatilities on Visa and Fastighetsbolaget 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 Fastighetsbolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Fastighetsbolaget.
Diversification Opportunities for Visa and Fastighetsbolaget
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Fastighetsbolaget is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Fastighetsbolaget Emilshus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastighetsbolaget 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 Fastighetsbolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastighetsbolaget has no effect on the direction of Visa i.e., Visa and Fastighetsbolaget go up and down completely randomly.
Pair Corralation between Visa and Fastighetsbolaget
Taking into account the 90-day investment horizon Visa is expected to generate 1.11 times less return on investment than Fastighetsbolaget. But when comparing it to its historical volatility, Visa Class A is 2.19 times less risky than Fastighetsbolaget. It trades about 0.35 of its potential returns per unit of risk. Fastighetsbolaget Emilshus AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,450 in Fastighetsbolaget Emilshus AB on September 1, 2024 and sell it today you would earn a total of 440.00 from holding Fastighetsbolaget Emilshus AB or generate 9.89% 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. Fastighetsbolaget Emilshus AB
Performance |
| Timeline |
| Visa Class A |
| Fastighetsbolaget |
Visa and Fastighetsbolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Fastighetsbolaget
The main advantage of trading using opposite Visa and Fastighetsbolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Fastighetsbolaget 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 Fastighetsbolaget will offset losses from the drop in Fastighetsbolaget's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Fastighetsbolaget vs. TradeDoubler AB | Fastighetsbolaget vs. Online Brands Nordic | Fastighetsbolaget vs. Beowulf Mining PLC | Fastighetsbolaget vs. FormPipe Software AB |
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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