Correlation Between Visa and First National
Can any of the company-specific risk be diversified away by investing in both Visa and First National 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 National 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 National of, you can compare the effects of market volatilities on Visa and First National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and First National.
Diversification Opportunities for Visa and First National
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and First is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and First National of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National has no effect on the direction of Visa i.e., Visa and First National go up and down completely randomly.
Pair Corralation between Visa and First National
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.49 times more return on investment than First National. However, Visa Class A is 2.05 times less risky than First National. It trades about 0.08 of its potential returns per unit of risk. First National of is currently generating about 0.0 per unit of risk. If you would invest 21,038 in Visa Class A on August 24, 2024 and sell it today you would earn a total of 9,954 from holding Visa Class A or generate 47.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.65% |
| Values | Daily Returns |
Visa Class A vs. First National of
Performance |
| Timeline |
| Visa Class A |
| First National |
Visa and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and First National
The main advantage of trading using opposite Visa and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, First National 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 National will offset losses from the drop in First National's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| First National vs. Washington Business Bank | First National vs. National Capital Bank | First National vs. Community Heritage Financial | First National vs. Citizens Financial Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |