Correlation Between Visa and Gudang Garam
Can any of the company-specific risk be diversified away by investing in both Visa and Gudang Garam 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 Gudang Garam 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 Gudang Garam Tbk, you can compare the effects of market volatilities on Visa and Gudang Garam 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 Gudang Garam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Gudang Garam.
Diversification Opportunities for Visa and Gudang Garam
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Gudang is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Gudang Garam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudang Garam Tbk 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 Gudang Garam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudang Garam Tbk has no effect on the direction of Visa i.e., Visa and Gudang Garam go up and down completely randomly.
Pair Corralation between Visa and Gudang Garam
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.94 times more return on investment than Gudang Garam. However, Visa Class A is 1.07 times less risky than Gudang Garam. It trades about 0.34 of its potential returns per unit of risk. Gudang Garam Tbk is currently generating about -0.24 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% 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. Gudang Garam Tbk
Performance |
| Timeline |
| Visa Class A |
| Gudang Garam Tbk |
Visa and Gudang Garam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Gudang Garam
The main advantage of trading using opposite Visa and Gudang Garam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Gudang Garam 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 Gudang Garam will offset losses from the drop in Gudang Garam's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Gudang Garam vs. Hanjaya Mandala Sampoerna | Gudang Garam vs. Unilever Indonesia Tbk | Gudang Garam vs. PT Indofood Sukses | Gudang Garam vs. United Tractors Tbk |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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