Correlation Between Visa and IShares AEX
Can any of the company-specific risk be diversified away by investing in both Visa and IShares AEX 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 IShares AEX 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 iShares AEX UCITS, you can compare the effects of market volatilities on Visa and IShares AEX 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 IShares AEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and IShares AEX.
Diversification Opportunities for Visa and IShares AEX
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and IShares is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and iShares AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AEX UCITS 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 IShares AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares AEX UCITS has no effect on the direction of Visa i.e., Visa and IShares AEX go up and down completely randomly.
Pair Corralation between Visa and IShares AEX
Taking into account the 90-day investment horizon Visa is expected to generate 2.02 times less return on investment than IShares AEX. In addition to that, Visa is 1.12 times more volatile than iShares AEX UCITS. It trades about 0.11 of its total potential returns per unit of risk. iShares AEX UCITS is currently generating about 0.25 per unit of volatility. If you would invest 8,643 in iShares AEX UCITS on September 13, 2024 and sell it today you would earn a total of 322.00 from holding iShares AEX UCITS or generate 3.73% 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. iShares AEX UCITS
Performance |
| Timeline |
| Visa Class A |
| iShares AEX UCITS |
Visa and IShares AEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and IShares AEX
The main advantage of trading using opposite Visa and IShares AEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, IShares AEX 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 IShares AEX will offset losses from the drop in IShares AEX's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| IShares AEX vs. Vanguard SP 500 | IShares AEX vs. iShares II Public | IShares AEX vs. Vanguard FTSE All World | IShares AEX vs. iShares SP 500 |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |