Correlation Between Visa and Golden Star
Can any of the company-specific risk be diversified away by investing in both Visa and Golden Star 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 Golden Star 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 Golden Star Acquisition, you can compare the effects of market volatilities on Visa and Golden Star 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 Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Golden Star.
Diversification Opportunities for Visa and Golden Star
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Golden is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Visa i.e., Visa and Golden Star go up and down completely randomly.
Pair Corralation between Visa and Golden Star
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.05 times more return on investment than Golden Star. However, Visa Class A is 21.44 times less risky than Golden Star. It trades about 0.49 of its potential returns per unit of risk. Golden Star Acquisition is currently generating about -0.25 per unit of risk. If you would invest 31,440 in Visa Class A on November 2, 2024 and sell it today you would earn a total of 2,865 from holding Visa Class A or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Visa Class A vs. Golden Star Acquisition
Performance |
| Timeline |
| Visa Class A |
| Golden Star Acquisition |
Visa and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Golden Star
The main advantage of trading using opposite Visa and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Golden Star vs. Cadence Design Systems | Golden Star vs. SmartStop Self Storage | Golden Star vs. Titan Machinery | Golden Star vs. Sea |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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