Correlation Between Visa and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both Visa and Barclays ETN 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 Barclays ETN 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 Barclays ETN FI, you can compare the effects of market volatilities on Visa and Barclays ETN 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 Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Barclays ETN.
Diversification Opportunities for Visa and Barclays ETN
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Barclays is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Barclays ETN FI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN FI 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 Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN FI has no effect on the direction of Visa i.e., Visa and Barclays ETN go up and down completely randomly.
Pair Corralation between Visa and Barclays ETN
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.2 times more return on investment than Barclays ETN. However, Visa is 1.2 times more volatile than Barclays ETN FI. It trades about 0.09 of its potential returns per unit of risk. Barclays ETN FI is currently generating about -0.02 per unit of risk. If you would invest 27,110 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 4,398 from holding Visa Class A or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Barclays ETN FI
Performance |
| Timeline |
| Visa Class A |
| Barclays ETN FI |
Visa and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Barclays ETN
The main advantage of trading using opposite Visa and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Barclays ETN vs. Freedom Day Dividend | Barclays ETN vs. iShares MSCI China | Barclays ETN vs. SmartETFs Dividend Builder | Barclays ETN vs. Tidal ETF 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |