Correlation Between Visa and Grenke AG
Can any of the company-specific risk be diversified away by investing in both Visa and Grenke AG 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 Grenke AG 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 Grenke AG, you can compare the effects of market volatilities on Visa and Grenke AG 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 Grenke AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Grenke AG.
Diversification Opportunities for Visa and Grenke AG
Pay attention - limited upside
The 3 months correlation between Visa and Grenke is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Grenke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenke AG 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 Grenke AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenke AG has no effect on the direction of Visa i.e., Visa and Grenke AG go up and down completely randomly.
Pair Corralation between Visa and Grenke AG
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.37 times more return on investment than Grenke AG. However, Visa Class A is 2.71 times less risky than Grenke AG. It trades about 0.08 of its potential returns per unit of risk. Grenke AG is currently generating about -0.06 per unit of risk. If you would invest 27,758 in Visa Class A on September 5, 2024 and sell it today you would earn a total of 3,543 from holding Visa Class A or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Visa Class A vs. Grenke AG
Performance |
| Timeline |
| Visa Class A |
| Grenke AG |
Visa and Grenke AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Grenke AG
The main advantage of trading using opposite Visa and Grenke AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Grenke AG 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 Grenke AG will offset losses from the drop in Grenke AG's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Grenke AG vs. Visa Inc | Grenke AG vs. Visa Inc | Grenke AG vs. American Express | Grenke AG vs. ORIX Corporation |
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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