Correlation Between Visa and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both Visa and INFICON 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 INFICON 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 INFICON Holding AG, you can compare the effects of market volatilities on Visa and INFICON 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and INFICON Holding.
Diversification Opportunities for Visa and INFICON Holding
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and INFICON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON Holding AG 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of Visa i.e., Visa and INFICON Holding go up and down completely randomly.
Pair Corralation between Visa and INFICON Holding
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.12 times more return on investment than INFICON Holding. However, Visa Class A is 8.57 times less risky than INFICON Holding. It trades about 0.08 of its potential returns per unit of risk. INFICON Holding AG is currently generating about -0.21 per unit of risk. If you would invest 30,985 in Visa Class A on September 13, 2024 and sell it today you would earn a total of 394.00 from holding Visa Class A or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. INFICON Holding AG
Performance |
| Timeline |
| Visa Class A |
| INFICON Holding AG |
Visa and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and INFICON Holding
The main advantage of trading using opposite Visa and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, INFICON 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 INFICON Holding will offset losses from the drop in INFICON Holding's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| INFICON Holding vs. Copa Holdings SA | INFICON Holding vs. United Airlines Holdings | INFICON Holding vs. Delta Air Lines | INFICON Holding vs. SkyWest |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |