Correlation Between Visa and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both Visa and EMvision Medical 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 EMvision Medical 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 EMvision Medical Devices, you can compare the effects of market volatilities on Visa and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and EMvision Medical.
Diversification Opportunities for Visa and EMvision Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and EMvision is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Visa i.e., Visa and EMvision Medical go up and down completely randomly.
Pair Corralation between Visa and EMvision Medical
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.38 times more return on investment than EMvision Medical. However, Visa Class A is 2.64 times less risky than EMvision Medical. It trades about 0.1 of its potential returns per unit of risk. EMvision Medical Devices is currently generating about -0.02 per unit of risk. If you would invest 26,706 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 4,476 from holding Visa Class A or generate 16.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.0% |
| Values | Daily Returns |
Visa Class A vs. EMvision Medical Devices
Performance |
| Timeline |
| Visa Class A |
| EMvision Medical Devices |
Visa and EMvision Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and EMvision Medical
The main advantage of trading using opposite Visa and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| EMvision Medical vs. EVE Health Group | EMvision Medical vs. Charter Hall Retail | EMvision Medical vs. Saferoads Holdings | EMvision Medical vs. Group 6 Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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