Correlation Between Visa and FTAC Emerald
Can any of the company-specific risk be diversified away by investing in both Visa and FTAC Emerald 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 FTAC Emerald 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 FTAC Emerald Acquisition, you can compare the effects of market volatilities on Visa and FTAC Emerald 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 FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and FTAC Emerald.
Diversification Opportunities for Visa and FTAC Emerald
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and FTAC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and FTAC Emerald Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAC Emerald Acquisition 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 FTAC Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAC Emerald Acquisition has no effect on the direction of Visa i.e., Visa and FTAC Emerald go up and down completely randomly.
Pair Corralation between Visa and FTAC Emerald
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.49 times more return on investment than FTAC Emerald. However, Visa is 1.49 times more volatile than FTAC Emerald Acquisition. It trades about 0.35 of its potential returns per unit of risk. FTAC Emerald Acquisition is currently generating about 0.15 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. FTAC Emerald Acquisition
Performance |
| Timeline |
| Visa Class A |
| FTAC Emerald Acquisition |
Visa and FTAC Emerald Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and FTAC Emerald
The main advantage of trading using opposite Visa and FTAC Emerald positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, FTAC Emerald 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 FTAC Emerald will offset losses from the drop in FTAC Emerald's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| FTAC Emerald vs. HF Sinclair Corp | FTAC Emerald vs. Qualys Inc | FTAC Emerald vs. NetSol Technologies | FTAC Emerald vs. Cebu Air ADR |
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..
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