Correlation Between Visa and Fast Ejendom
Can any of the company-specific risk be diversified away by investing in both Visa and Fast Ejendom 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 Fast Ejendom 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 Fast Ejendom, you can compare the effects of market volatilities on Visa and Fast Ejendom 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 Fast Ejendom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Fast Ejendom.
Diversification Opportunities for Visa and Fast Ejendom
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Fast is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Fast Ejendom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Ejendom 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 Fast Ejendom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Ejendom has no effect on the direction of Visa i.e., Visa and Fast Ejendom go up and down completely randomly.
Pair Corralation between Visa and Fast Ejendom
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.26 times more return on investment than Fast Ejendom. However, Visa is 1.26 times more volatile than Fast Ejendom. It trades about 0.34 of its potential returns per unit of risk. Fast Ejendom is currently generating about -0.14 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Fast Ejendom
Performance |
| Timeline |
| Visa Class A |
| Fast Ejendom |
Visa and Fast Ejendom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Fast Ejendom
The main advantage of trading using opposite Visa and Fast Ejendom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Fast Ejendom 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 Fast Ejendom will offset losses from the drop in Fast Ejendom's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Fast Ejendom vs. Jeudan | Fast Ejendom vs. Copenhagen Capital AS | Fast Ejendom vs. Cemat AS | Fast Ejendom vs. Movinn AS |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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