Correlation Between Visa and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Visa and Fidelity China 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 Fidelity China 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 Fidelity China Region, you can compare the effects of market volatilities on Visa and Fidelity China 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 Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Fidelity China.
Diversification Opportunities for Visa and Fidelity China
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Fidelity is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Fidelity China Region in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Region 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 Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Region has no effect on the direction of Visa i.e., Visa and Fidelity China go up and down completely randomly.
Pair Corralation between Visa and Fidelity China
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.83 times more return on investment than Fidelity China. However, Visa Class A is 1.2 times less risky than Fidelity China. It trades about 0.34 of its potential returns per unit of risk. Fidelity China Region is currently generating about -0.16 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Fidelity China Region
Performance |
| Timeline |
| Visa Class A |
| Fidelity China Region |
Visa and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Fidelity China
The main advantage of trading using opposite Visa and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Fidelity China 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 Fidelity China will offset losses from the drop in Fidelity China's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Fidelity China vs. Fidelity Freedom 2015 | Fidelity China vs. Fidelity Puritan Fund | Fidelity China vs. Fidelity Puritan Fund | Fidelity China vs. Fidelity Pennsylvania Municipal |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |