Correlation Between Visa and ITAB Shop
Can any of the company-specific risk be diversified away by investing in both Visa and ITAB Shop 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 ITAB Shop 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 ITAB Shop Concept, you can compare the effects of market volatilities on Visa and ITAB Shop 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 ITAB Shop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and ITAB Shop.
Diversification Opportunities for Visa and ITAB Shop
Excellent diversification
The 3 months correlation between Visa and ITAB is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and ITAB Shop Concept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITAB Shop Concept 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 ITAB Shop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITAB Shop Concept has no effect on the direction of Visa i.e., Visa and ITAB Shop go up and down completely randomly.
Pair Corralation between Visa and ITAB Shop
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.59 times more return on investment than ITAB Shop. However, Visa Class A is 1.7 times less risky than ITAB Shop. It trades about 0.35 of its potential returns per unit of risk. ITAB Shop Concept is currently generating about -0.29 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 | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Visa Class A vs. ITAB Shop Concept
Performance |
| Timeline |
| Visa Class A |
| ITAB Shop Concept |
Visa and ITAB Shop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and ITAB Shop
The main advantage of trading using opposite Visa and ITAB Shop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, ITAB Shop 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 ITAB Shop will offset losses from the drop in ITAB Shop's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| ITAB Shop vs. Inwido AB | ITAB Shop vs. Elanders AB | ITAB Shop vs. Byggmax Group AB | ITAB Shop vs. Dustin Group AB |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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