Correlation Between Visa and Intchains Group
Can any of the company-specific risk be diversified away by investing in both Visa and Intchains Group 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 Intchains Group 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 Intchains Group Limited, you can compare the effects of market volatilities on Visa and Intchains Group 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 Intchains Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Intchains Group.
Diversification Opportunities for Visa and Intchains Group
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Intchains is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group 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 Intchains Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intchains Group has no effect on the direction of Visa i.e., Visa and Intchains Group go up and down completely randomly.
Pair Corralation between Visa and Intchains Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.19 times more return on investment than Intchains Group. However, Visa Class A is 5.21 times less risky than Intchains Group. It trades about 0.09 of its potential returns per unit of risk. Intchains Group Limited is currently generating about -0.05 per unit of risk. If you would invest 26,992 in Visa Class A on August 25, 2024 and sell it today you would earn a total of 4,000 from holding Visa Class A or generate 14.82% 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. Intchains Group Limited
Performance |
| Timeline |
| Visa Class A |
| Intchains Group |
Visa and Intchains Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Intchains Group
The main advantage of trading using opposite Visa and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Intchains Group 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 Intchains Group will offset losses from the drop in Intchains Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Intchains Group vs. Teradyne | Intchains Group vs. Veeco Instruments | Intchains Group vs. IPG Photonics | Intchains Group vs. Applied Materials |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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