Correlation Between Visa and First IC
Can any of the company-specific risk be diversified away by investing in both Visa and First IC 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 IC 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 IC, you can compare the effects of market volatilities on Visa and First IC 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 IC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and First IC.
Diversification Opportunities for Visa and First IC
Very weak diversification
The 3 months correlation between Visa and First is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and First IC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First IC 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 IC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First IC has no effect on the direction of Visa i.e., Visa and First IC go up and down completely randomly.
Pair Corralation between Visa and First IC
Taking into account the 90-day investment horizon Visa is expected to generate 2.65 times less return on investment than First IC. But when comparing it to its historical volatility, Visa Class A is 1.66 times less risky than First IC. It trades about 0.14 of its potential returns per unit of risk. First IC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 890.00 in First IC on October 26, 2024 and sell it today you would earn a total of 140.00 from holding First IC or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. First IC
Performance |
| Timeline |
| Visa Class A |
| First IC |
Visa and First IC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and First IC
The main advantage of trading using opposite Visa and First IC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, First IC 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 IC will offset losses from the drop in First IC's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| First IC vs. CCFNB Bancorp | First IC vs. Glen Burnie Bancorp | First IC vs. Main Street Financial | First IC vs. Enterprise Financial Services |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |