Correlation Between Visa and Japan Asia
Can any of the company-specific risk be diversified away by investing in both Visa and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on Visa and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Japan Asia.
Diversification Opportunities for Visa and Japan Asia
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Japan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of Visa i.e., Visa and Japan Asia go up and down completely randomly.
Pair Corralation between Visa and Japan Asia
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.86 times more return on investment than Japan Asia. However, Visa Class A is 1.16 times less risky than Japan Asia. It trades about 0.41 of its potential returns per unit of risk. Japan Asia Investment is currently generating about 0.18 per unit of risk. If you would invest 28,134 in Visa Class A on August 30, 2024 and sell it today you would earn a total of 3,336 from holding Visa Class A or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Japan Asia Investment
Performance |
| Timeline |
| Visa Class A |
| Japan Asia Investment |
Visa and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Japan Asia
The main advantage of trading using opposite Visa and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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