Correlation Between Visa and Amplify International
Can any of the company-specific risk be diversified away by investing in both Visa and Amplify International 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 Amplify International 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 Amplify International Enhanced, you can compare the effects of market volatilities on Visa and Amplify International 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 Amplify International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amplify International.
Diversification Opportunities for Visa and Amplify International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Amplify is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Amplify International Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify International 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 Amplify International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify International has no effect on the direction of Visa i.e., Visa and Amplify International go up and down completely randomly.
Pair Corralation between Visa and Amplify International
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.26 times more return on investment than Amplify International. However, Visa is 1.26 times more volatile than Amplify International Enhanced. It trades about 0.09 of its potential returns per unit of risk. Amplify International Enhanced is currently generating about 0.08 per unit of risk. If you would invest 25,457 in Visa Class A on September 4, 2024 and sell it today you would earn a total of 6,208 from holding Visa Class A or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Amplify International Enhanced
Performance |
| Timeline |
| Visa Class A |
| Amplify International |
Visa and Amplify International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amplify International
The main advantage of trading using opposite Visa and Amplify International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Amplify International 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 Amplify International will offset losses from the drop in Amplify International's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Amplify International vs. Amplify ETF Trust | Amplify International vs. Amplify CWP Enhanced | Amplify International vs. Schwab International Dividend | Amplify International vs. iShares Trust |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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