Correlation Between Visa and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Visa and Guinness Atkinson 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 Guinness Atkinson 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 Guinness Atkinson Global, you can compare the effects of market volatilities on Visa and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Guinness Atkinson.
Diversification Opportunities for Visa and Guinness Atkinson
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Guinness is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Visa i.e., Visa and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Visa and Guinness Atkinson
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.99 times more return on investment than Guinness Atkinson. However, Visa Class A is 1.01 times less risky than Guinness Atkinson. It trades about 0.09 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about 0.07 per unit of risk. If you would invest 23,481 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 7,511 from holding Visa Class A or generate 31.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Guinness Atkinson Global
Performance |
| Timeline |
| Visa Class A |
| Guinness Atkinson Global |
Visa and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Guinness Atkinson
The main advantage of trading using opposite Visa and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Guinness Atkinson vs. Guinness Atkinson Global | Guinness Atkinson vs. Siit Dynamic Asset | Guinness Atkinson vs. Simt Sp 500 | Guinness Atkinson vs. Columbia Large Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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