Correlation Between Visa and Juniper
Can any of the company-specific risk be diversified away by investing in both Visa and Juniper 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 Juniper 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 Juniper Group, you can compare the effects of market volatilities on Visa and Juniper 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 Juniper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Juniper.
Diversification Opportunities for Visa and Juniper
Poor diversification
The 3 months correlation between Visa and Juniper is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Juniper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Group 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 Juniper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Group has no effect on the direction of Visa i.e., Visa and Juniper go up and down completely randomly.
Pair Corralation between Visa and Juniper
Taking into account the 90-day investment horizon Visa Class A is expected to generate 3.2 times more return on investment than Juniper. However, Visa is 3.2 times more volatile than Juniper Group. It trades about 0.34 of its potential returns per unit of risk. Juniper Group is currently generating about 0.36 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Juniper Group
Performance |
| Timeline |
| Visa Class A |
| Juniper Group |
Visa and Juniper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Juniper
The main advantage of trading using opposite Visa and Juniper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Juniper 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 Juniper will offset losses from the drop in Juniper's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Juniper vs. FT Vest Equity | Juniper vs. Northern Lights | Juniper vs. Dimensional International High | Juniper vs. Matthews China Discovery |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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