Correlation Between Visa and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Visa and Genmab AS 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 Genmab AS 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 Genmab AS, you can compare the effects of market volatilities on Visa and Genmab AS 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 Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Genmab AS.
Diversification Opportunities for Visa and Genmab AS
Excellent diversification
The 3 months correlation between Visa and Genmab is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS 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 Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of Visa i.e., Visa and Genmab AS go up and down completely randomly.
Pair Corralation between Visa and Genmab AS
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.55 times more return on investment than Genmab AS. However, Visa Class A is 1.82 times less risky than Genmab AS. It trades about 0.09 of its potential returns per unit of risk. Genmab AS is currently generating about -0.08 per unit of risk. If you would invest 20,586 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 10,406 from holding Visa Class A or generate 50.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Genmab AS
Performance |
| Timeline |
| Visa Class A |
| Genmab AS |
Visa and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Genmab AS
The main advantage of trading using opposite Visa and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Genmab AS 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 Genmab AS will offset losses from the drop in Genmab AS's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Genmab AS vs. Eliem Therapeutics | Genmab AS vs. HCW Biologics | Genmab AS vs. Scpharmaceuticals | Genmab AS vs. Milestone Pharmaceuticals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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