Correlation Between Visa and Huize Holding
Can any of the company-specific risk be diversified away by investing in both Visa and Huize Holding 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 Huize Holding 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 Huize Holding, you can compare the effects of market volatilities on Visa and Huize Holding 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 Huize Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Huize Holding.
Diversification Opportunities for Visa and Huize Holding
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Huize is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding 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 Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of Visa i.e., Visa and Huize Holding go up and down completely randomly.
Pair Corralation between Visa and Huize Holding
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.23 times more return on investment than Huize Holding. However, Visa Class A is 4.4 times less risky than Huize Holding. It trades about 0.37 of its potential returns per unit of risk. Huize Holding is currently generating about 0.06 per unit of risk. If you would invest 31,604 in Visa Class A on November 1, 2024 and sell it today you would earn a total of 1,984 from holding Visa Class A or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Huize Holding
Performance |
| Timeline |
| Visa Class A |
| Huize Holding |
Visa and Huize Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Huize Holding
The main advantage of trading using opposite Visa and Huize Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Huize Holding 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 Huize Holding will offset losses from the drop in Huize Holding's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Huize Holding vs. CorVel Corp | Huize Holding vs. Erie Indemnity | Huize Holding vs. Crawford Company | Huize Holding vs. eHealth |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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