Correlation Between Visa and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Visa and Kansai Electric 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 Kansai Electric 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 Kansai Electric Power, you can compare the effects of market volatilities on Visa and Kansai Electric 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 Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kansai Electric.
Diversification Opportunities for Visa and Kansai Electric
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Kansai is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kansai Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric Power 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 Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric Power has no effect on the direction of Visa i.e., Visa and Kansai Electric go up and down completely randomly.
Pair Corralation between Visa and Kansai Electric
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.24 times more return on investment than Kansai Electric. However, Visa Class A is 4.25 times less risky than Kansai Electric. It trades about 0.33 of its potential returns per unit of risk. Kansai Electric Power is currently generating about -0.26 per unit of risk. If you would invest 28,960 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 2,510 from holding Visa Class A or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Kansai Electric Power
Performance |
| Timeline |
| Visa Class A |
| Kansai Electric Power |
Visa and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kansai Electric
The main advantage of trading using opposite Visa and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Kansai Electric vs. Constellation Energy Corp | Kansai Electric vs. Orsted AS ADR | Kansai Electric vs. Orsted AS | Kansai Electric vs. HUMANA INC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |