Correlation Between Visa and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Visa and Kayne Anderson 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 Kayne Anderson 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 Kayne Anderson Renewable, you can compare the effects of market volatilities on Visa and Kayne Anderson 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 Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kayne Anderson.
Diversification Opportunities for Visa and Kayne Anderson
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Kayne is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kayne Anderson Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson Renewable 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 Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson Renewable has no effect on the direction of Visa i.e., Visa and Kayne Anderson go up and down completely randomly.
Pair Corralation between Visa and Kayne Anderson
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.38 times more return on investment than Kayne Anderson. However, Visa is 1.38 times more volatile than Kayne Anderson Renewable. It trades about 0.11 of its potential returns per unit of risk. Kayne Anderson Renewable is currently generating about 0.07 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Visa Class A vs. Kayne Anderson Renewable
Performance |
| Timeline |
| Visa Class A |
| Kayne Anderson Renewable |
Visa and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kayne Anderson
The main advantage of trading using opposite Visa and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kayne Anderson 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 Kayne Anderson will offset losses from the drop in Kayne Anderson's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Kayne Anderson vs. Kayne Anderson Renewable | Kayne Anderson vs. Pimco Income Strategy | Kayne Anderson vs. Fidelity Freedom Index | Kayne Anderson vs. Schwab Sp 500 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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