Correlation Between Visa and KBC Groep
Can any of the company-specific risk be diversified away by investing in both Visa and KBC Groep 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 KBC Groep 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 KBC Groep NV, you can compare the effects of market volatilities on Visa and KBC Groep 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 KBC Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and KBC Groep.
Diversification Opportunities for Visa and KBC Groep
Very good diversification
The 3 months correlation between Visa and KBC is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and KBC Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Groep NV 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 KBC Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Groep NV has no effect on the direction of Visa i.e., Visa and KBC Groep go up and down completely randomly.
Pair Corralation between Visa and KBC Groep
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.9 times more return on investment than KBC Groep. However, Visa Class A is 1.11 times less risky than KBC Groep. It trades about 0.37 of its potential returns per unit of risk. KBC Groep NV is currently generating about -0.01 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. KBC Groep NV
Performance |
| Timeline |
| Visa Class A |
| KBC Groep NV |
Visa and KBC Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and KBC Groep
The main advantage of trading using opposite Visa and KBC Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, KBC Groep 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 KBC Groep will offset losses from the drop in KBC Groep's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| KBC Groep vs. DBS Group Holdings | KBC Groep vs. United Overseas Bank | KBC Groep vs. Overseas Chinese Banking | KBC Groep vs. China Minsh |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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