Correlation Between Visa and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Visa and IShares MSCI 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 IShares MSCI 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 iShares MSCI Germany, you can compare the effects of market volatilities on Visa and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and IShares MSCI.
Diversification Opportunities for Visa and IShares MSCI
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and IShares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and iShares MSCI Germany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Germany 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Germany has no effect on the direction of Visa i.e., Visa and IShares MSCI go up and down completely randomly.
Pair Corralation between Visa and IShares MSCI
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.04 times more return on investment than IShares MSCI. However, Visa is 1.04 times more volatile than iShares MSCI Germany. It trades about 0.08 of its potential returns per unit of risk. iShares MSCI Germany is currently generating about 0.06 per unit of risk. If you would invest 21,128 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 10,342 from holding Visa Class A or generate 48.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. iShares MSCI Germany
Performance |
| Timeline |
| Visa Class A |
| iShares MSCI Germany |
Visa and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and IShares MSCI
The main advantage of trading using opposite Visa and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| IShares MSCI vs. iShares MSCI United | IShares MSCI vs. iShares MSCI France | IShares MSCI vs. iShares MSCI Spain | IShares MSCI vs. iShares MSCI Italy |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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