Correlation Between Visa and Global Ship
Can any of the company-specific risk be diversified away by investing in both Visa and Global Ship 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 Global Ship 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 Global Ship Lease, you can compare the effects of market volatilities on Visa and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Global Ship.
Diversification Opportunities for Visa and Global Ship
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Global is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Visa i.e., Visa and Global Ship go up and down completely randomly.
Pair Corralation between Visa and Global Ship
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.65 times more return on investment than Global Ship. However, Visa Class A is 1.53 times less risky than Global Ship. It trades about 0.29 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.15 per unit of risk. If you would invest 26,911 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 4,081 from holding Visa Class A or generate 15.16% 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. Global Ship Lease
Performance |
| Timeline |
| Visa Class A |
| Global Ship Lease |
Visa and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Global Ship
The main advantage of trading using opposite Visa and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship vs. Star Bulk Carriers |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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