Correlation Between Visa and Haoxi Health
Can any of the company-specific risk be diversified away by investing in both Visa and Haoxi Health 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 Haoxi Health 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 Haoxi Health Technology, you can compare the effects of market volatilities on Visa and Haoxi Health 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 Haoxi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Haoxi Health.
Diversification Opportunities for Visa and Haoxi Health
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Haoxi is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Haoxi Health Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haoxi Health Technology 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 Haoxi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haoxi Health Technology has no effect on the direction of Visa i.e., Visa and Haoxi Health go up and down completely randomly.
Pair Corralation between Visa and Haoxi Health
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.09 times more return on investment than Haoxi Health. However, Visa Class A is 10.75 times less risky than Haoxi Health. It trades about 0.17 of its potential returns per unit of risk. Haoxi Health Technology is currently generating about -0.25 per unit of risk. If you would invest 27,584 in Visa Class A on August 30, 2024 and sell it today you would earn a total of 3,886 from holding Visa Class A or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Haoxi Health Technology
Performance |
| Timeline |
| Visa Class A |
| Haoxi Health Technology |
Visa and Haoxi Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Haoxi Health
The main advantage of trading using opposite Visa and Haoxi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Haoxi Health 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 Haoxi Health will offset losses from the drop in Haoxi Health's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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