Correlation Between Visa and Gaming Factory
Can any of the company-specific risk be diversified away by investing in both Visa and Gaming Factory 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 Gaming Factory 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 Gaming Factory SA, you can compare the effects of market volatilities on Visa and Gaming Factory 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 Gaming Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Gaming Factory.
Diversification Opportunities for Visa and Gaming Factory
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Gaming is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Gaming Factory SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Factory SA 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 Gaming Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Factory SA has no effect on the direction of Visa i.e., Visa and Gaming Factory go up and down completely randomly.
Pair Corralation between Visa and Gaming Factory
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.22 times more return on investment than Gaming Factory. However, Visa Class A is 4.46 times less risky than Gaming Factory. It trades about 0.33 of its potential returns per unit of risk. Gaming Factory SA is currently generating about -0.06 per unit of risk. If you would invest 28,960 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 2,510 from holding Visa Class A or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Visa Class A vs. Gaming Factory SA
Performance |
| Timeline |
| Visa Class A |
| Gaming Factory SA |
Visa and Gaming Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Gaming Factory
The main advantage of trading using opposite Visa and Gaming Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Gaming Factory 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 Gaming Factory will offset losses from the drop in Gaming Factory's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Gaming Factory vs. LSI Software SA | Gaming Factory vs. Quantum Software SA | Gaming Factory vs. CI Games SA | Gaming Factory vs. Carlson Investments SA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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