Correlation Between Visa and Global Cannabis
Can any of the company-specific risk be diversified away by investing in both Visa and Global Cannabis 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 Global Cannabis 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 Global Cannabis Applications, you can compare the effects of market volatilities on Visa and Global Cannabis 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 Global Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Global Cannabis.
Diversification Opportunities for Visa and Global Cannabis
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Global is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Global Cannabis Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Cannabis Appl 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 Global Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Cannabis Appl has no effect on the direction of Visa i.e., Visa and Global Cannabis go up and down completely randomly.
Pair Corralation between Visa and Global Cannabis
Taking into account the 90-day investment horizon Visa is expected to generate 9.93 times less return on investment than Global Cannabis. But when comparing it to its historical volatility, Visa Class A is 17.29 times less risky than Global Cannabis. It trades about 0.09 of its potential returns per unit of risk. Global Cannabis Applications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.49 in Global Cannabis Applications on September 3, 2024 and sell it today you would lose (1.18) from holding Global Cannabis Applications or give up 79.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Global Cannabis Applications
Performance |
| Timeline |
| Visa Class A |
| Global Cannabis Appl |
Visa and Global Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Global Cannabis
The main advantage of trading using opposite Visa and Global Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Global Cannabis 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 Global Cannabis will offset losses from the drop in Global Cannabis' long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Global Cannabis vs. Skkynet Cloud Systems | Global Cannabis vs. TonnerOne World Holdings | Global Cannabis vs. Visium Technologies | Global Cannabis vs. Zenvia Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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