Correlation Between Visa and GI Group
Can any of the company-specific risk be diversified away by investing in both Visa and GI Group 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 GI Group 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 GI Group Poland, you can compare the effects of market volatilities on Visa and GI Group 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 GI Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and GI Group.
Diversification Opportunities for Visa and GI Group
Very good diversification
The 3 months correlation between Visa and GIG is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and GI Group Poland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GI Group Poland 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 GI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GI Group Poland has no effect on the direction of Visa i.e., Visa and GI Group go up and down completely randomly.
Pair Corralation between Visa and GI Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.42 times more return on investment than GI Group. However, Visa Class A is 2.38 times less risky than GI Group. It trades about 0.1 of its potential returns per unit of risk. GI Group Poland is currently generating about 0.01 per unit of risk. If you would invest 22,047 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 9,461 from holding Visa Class A or generate 42.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Visa Class A vs. GI Group Poland
Performance |
| Timeline |
| Visa Class A |
| GI Group Poland |
Visa and GI Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and GI Group
The main advantage of trading using opposite Visa and GI Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, GI Group 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 GI Group will offset losses from the drop in GI Group's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| GI Group vs. Movie Games SA | GI Group vs. Gamedust SA | GI Group vs. mBank SA | GI Group vs. Biztech Konsulting 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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