Correlation Between Visa and Inpost SA
Can any of the company-specific risk be diversified away by investing in both Visa and Inpost SA 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 Inpost SA 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 Inpost SA, you can compare the effects of market volatilities on Visa and Inpost SA 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 Inpost SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Inpost SA.
Diversification Opportunities for Visa and Inpost SA
Good diversification
The 3 months correlation between Visa and Inpost is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Inpost SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpost SA 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 Inpost SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpost SA has no effect on the direction of Visa i.e., Visa and Inpost SA go up and down completely randomly.
Pair Corralation between Visa and Inpost SA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.59 times more return on investment than Inpost SA. However, Visa Class A is 1.7 times less risky than Inpost SA. It trades about 0.35 of its potential returns per unit of risk. Inpost SA is currently generating about -0.17 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Inpost SA
Performance |
| Timeline |
| Visa Class A |
| Inpost SA |
Visa and Inpost SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Inpost SA
The main advantage of trading using opposite Visa and Inpost SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Inpost SA 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 Inpost SA will offset losses from the drop in Inpost SA's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Inpost SA vs. PostNL NV | Inpost SA vs. Koninklijke Heijmans NV | Inpost SA vs. OCI NV | Inpost SA vs. Koninklijke Vopak NV |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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