Correlation Between Visa and JEMTEC
Can any of the company-specific risk be diversified away by investing in both Visa and JEMTEC 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 JEMTEC 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 JEMTEC Inc, you can compare the effects of market volatilities on Visa and JEMTEC 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 JEMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and JEMTEC.
Diversification Opportunities for Visa and JEMTEC
Very poor diversification
The 3 months correlation between Visa and JEMTEC is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and JEMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JEMTEC Inc 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 JEMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JEMTEC Inc has no effect on the direction of Visa i.e., Visa and JEMTEC go up and down completely randomly.
Pair Corralation between Visa and JEMTEC
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.29 times more return on investment than JEMTEC. However, Visa Class A is 3.47 times less risky than JEMTEC. It trades about 0.09 of its potential returns per unit of risk. JEMTEC Inc is currently generating about 0.01 per unit of risk. If you would invest 20,311 in Visa Class A on September 14, 2024 and sell it today you would earn a total of 11,112 from holding Visa Class A or generate 54.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Visa Class A vs. JEMTEC Inc
Performance |
| Timeline |
| Visa Class A |
| JEMTEC Inc |
Visa and JEMTEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and JEMTEC
The main advantage of trading using opposite Visa and JEMTEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, JEMTEC 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 JEMTEC will offset losses from the drop in JEMTEC's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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