Correlation Between Visa and HEDGE Brasil
Can any of the company-specific risk be diversified away by investing in both Visa and HEDGE Brasil 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 HEDGE Brasil 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 HEDGE Brasil Shopping, you can compare the effects of market volatilities on Visa and HEDGE Brasil 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 HEDGE Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and HEDGE Brasil.
Diversification Opportunities for Visa and HEDGE Brasil
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and HEDGE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and HEDGE Brasil Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEDGE Brasil Shopping 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 HEDGE Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEDGE Brasil Shopping has no effect on the direction of Visa i.e., Visa and HEDGE Brasil go up and down completely randomly.
Pair Corralation between Visa and HEDGE Brasil
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.21 times more return on investment than HEDGE Brasil. However, Visa is 1.21 times more volatile than HEDGE Brasil Shopping. It trades about 0.34 of its potential returns per unit of risk. HEDGE Brasil Shopping is currently generating about -0.11 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. HEDGE Brasil Shopping
Performance |
| Timeline |
| Visa Class A |
| HEDGE Brasil Shopping |
Visa and HEDGE Brasil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and HEDGE Brasil
The main advantage of trading using opposite Visa and HEDGE Brasil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, HEDGE Brasil 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 HEDGE Brasil will offset losses from the drop in HEDGE Brasil's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| HEDGE Brasil vs. BTG Pactual Logstica | HEDGE Brasil vs. Plano Plano Desenvolvimento | HEDGE Brasil vs. Cable One | HEDGE Brasil vs. ATMA Participaes SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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