Correlation Between Visa and GFC Green
Can any of the company-specific risk be diversified away by investing in both Visa and GFC Green 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 GFC Green 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 GFC Green Fields, you can compare the effects of market volatilities on Visa and GFC Green 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 GFC Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and GFC Green.
Diversification Opportunities for Visa and GFC Green
Very weak diversification
The 3 months correlation between Visa and GFC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and GFC Green Fields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFC Green Fields 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 GFC Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFC Green Fields has no effect on the direction of Visa i.e., Visa and GFC Green go up and down completely randomly.
Pair Corralation between Visa and GFC Green
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.55 times more return on investment than GFC Green. However, Visa Class A is 1.81 times less risky than GFC Green. It trades about 0.19 of its potential returns per unit of risk. GFC Green Fields is currently generating about -0.02 per unit of risk. If you would invest 27,538 in Visa Class A on November 28, 2024 and sell it today you would earn a total of 7,671 from holding Visa Class A or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.51% |
| Values | Daily Returns |
Visa Class A vs. GFC Green Fields
Performance |
| Timeline |
| Visa Class A |
| GFC Green Fields |
Visa and GFC Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and GFC Green
The main advantage of trading using opposite Visa and GFC Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, GFC Green 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 GFC Green will offset losses from the drop in GFC Green's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| GFC Green vs. Willy Food | GFC Green vs. Ormat Technologies | GFC Green vs. ICL Israel Chemicals | GFC Green vs. Imed Infinity Medical Limited |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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