Correlation Between Visa and GLATFELTER
Can any of the company-specific risk be diversified away by investing in both Visa and GLATFELTER 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 GLATFELTER 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 GLATFELTER, you can compare the effects of market volatilities on Visa and GLATFELTER 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 GLATFELTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and GLATFELTER.
Diversification Opportunities for Visa and GLATFELTER
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and GLATFELTER is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and GLATFELTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLATFELTER 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 GLATFELTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLATFELTER has no effect on the direction of Visa i.e., Visa and GLATFELTER go up and down completely randomly.
Pair Corralation between Visa and GLATFELTER
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.16 times more return on investment than GLATFELTER. However, Visa Class A is 6.23 times less risky than GLATFELTER. It trades about 0.09 of its potential returns per unit of risk. GLATFELTER is currently generating about 0.01 per unit of risk. If you would invest 20,311 in Visa Class A on September 17, 2024 and sell it today you would earn a total of 11,163 from holding Visa Class A or generate 54.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.42% |
| Values | Daily Returns |
Visa Class A vs. GLATFELTER
Performance |
| Timeline |
| Visa Class A |
| GLATFELTER |
Visa and GLATFELTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and GLATFELTER
The main advantage of trading using opposite Visa and GLATFELTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, GLATFELTER 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 GLATFELTER will offset losses from the drop in GLATFELTER's long position.The idea behind Visa Class A and GLATFELTER pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GLATFELTER vs. FORMPIPE SOFTWARE AB | GLATFELTER vs. Major Drilling Group | GLATFELTER vs. PRECISION DRILLING P | GLATFELTER vs. VITEC SOFTWARE GROUP |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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