Correlation Between Visa and First Citizens
Can any of the company-specific risk be diversified away by investing in both Visa and First Citizens 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 First Citizens 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 First Citizens BancShares, you can compare the effects of market volatilities on Visa and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and First Citizens.
Diversification Opportunities for Visa and First Citizens
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Visa i.e., Visa and First Citizens go up and down completely randomly.
Pair Corralation between Visa and First Citizens
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.81 times more return on investment than First Citizens. However, Visa Class A is 1.24 times less risky than First Citizens. It trades about 0.37 of its potential returns per unit of risk. First Citizens BancShares is currently generating about -0.01 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. First Citizens BancShares
Performance |
| Timeline |
| Visa Class A |
| First Citizens BancShares |
Visa and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and First Citizens
The main advantage of trading using opposite Visa and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, First Citizens 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 First Citizens will offset losses from the drop in First Citizens' long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| First Citizens vs. Fifth Third Bancorp | First Citizens vs. Dime Community Bancshares | First Citizens vs. Fifth Third Bancorp | First Citizens vs. Northern Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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