Correlation Between Visa and Icosavax
Can any of the company-specific risk be diversified away by investing in both Visa and Icosavax 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 Icosavax 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 Icosavax, you can compare the effects of market volatilities on Visa and Icosavax 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 Icosavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Icosavax.
Diversification Opportunities for Visa and Icosavax
Poor diversification
The 3 months correlation between Visa and Icosavax is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Icosavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icosavax 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 Icosavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icosavax has no effect on the direction of Visa i.e., Visa and Icosavax go up and down completely randomly.
Pair Corralation between Visa and Icosavax
If you would invest 31,440 in Visa Class A on November 2, 2024 and sell it today you would earn a total of 3,052 from holding Visa Class A or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Visa Class A vs. Icosavax
Performance |
| Timeline |
| Visa Class A |
| Icosavax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Icosavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Icosavax
The main advantage of trading using opposite Visa and Icosavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Icosavax 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 Icosavax will offset losses from the drop in Icosavax's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Icosavax vs. Terns Pharmaceuticals | Icosavax vs. Amylyx Pharmaceuticals | Icosavax vs. Acumen Pharmaceuticals | Icosavax vs. Inozyme Pharma |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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