Correlation Between Visa and Ing Solution
Can any of the company-specific risk be diversified away by investing in both Visa and Ing Solution 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 Ing Solution 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 Ing Solution 2025, you can compare the effects of market volatilities on Visa and Ing Solution 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 Ing Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ing Solution.
Diversification Opportunities for Visa and Ing Solution
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Ing is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ing Solution 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing Solution 2025 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 Ing Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Solution 2025 has no effect on the direction of Visa i.e., Visa and Ing Solution go up and down completely randomly.
Pair Corralation between Visa and Ing Solution
Taking into account the 90-day investment horizon Visa Class A is expected to generate 3.54 times more return on investment than Ing Solution. However, Visa is 3.54 times more volatile than Ing Solution 2025. It trades about 0.35 of its potential returns per unit of risk. Ing Solution 2025 is currently generating about 0.3 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Ing Solution 2025
Performance |
| Timeline |
| Visa Class A |
| Ing Solution 2025 |
Visa and Ing Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ing Solution
The main advantage of trading using opposite Visa and Ing Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ing Solution 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 Ing Solution will offset losses from the drop in Ing Solution's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Ing Solution vs. Prudential Real Estate | Ing Solution vs. Msif Real Estate | Ing Solution vs. Goldman Sachs Real | Ing Solution vs. Virtus Real Estate |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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