Correlation Between Visa and Kaya Holdings
Can any of the company-specific risk be diversified away by investing in both Visa and Kaya Holdings 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 Kaya Holdings 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 Kaya Holdings, you can compare the effects of market volatilities on Visa and Kaya Holdings 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 Kaya Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kaya Holdings.
Diversification Opportunities for Visa and Kaya Holdings
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Kaya is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kaya Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaya Holdings 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 Kaya Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaya Holdings has no effect on the direction of Visa i.e., Visa and Kaya Holdings go up and down completely randomly.
Pair Corralation between Visa and Kaya Holdings
Taking into account the 90-day investment horizon Visa is expected to generate 1.91 times less return on investment than Kaya Holdings. But when comparing it to its historical volatility, Visa Class A is 7.93 times less risky than Kaya Holdings. It trades about 0.34 of its potential returns per unit of risk. Kaya Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.53 in Kaya Holdings on September 2, 2024 and sell it today you would earn a total of 0.27 from holding Kaya Holdings or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Kaya Holdings
Performance |
| Timeline |
| Visa Class A |
| Kaya Holdings |
Visa and Kaya Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kaya Holdings
The main advantage of trading using opposite Visa and Kaya Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kaya Holdings 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 Kaya Holdings will offset losses from the drop in Kaya Holdings' 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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