Correlation Between Visa and Kentima Holding
Can any of the company-specific risk be diversified away by investing in both Visa and Kentima Holding 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 Kentima Holding 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 Kentima Holding publ, you can compare the effects of market volatilities on Visa and Kentima Holding 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 Kentima Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kentima Holding.
Diversification Opportunities for Visa and Kentima Holding
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Kentima is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kentima Holding publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentima Holding publ 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 Kentima Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentima Holding publ has no effect on the direction of Visa i.e., Visa and Kentima Holding go up and down completely randomly.
Pair Corralation between Visa and Kentima Holding
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.18 times more return on investment than Kentima Holding. However, Visa Class A is 5.55 times less risky than Kentima Holding. It trades about 0.33 of its potential returns per unit of risk. Kentima Holding publ is currently generating about -0.02 per unit of risk. If you would invest 34,247 in Visa Class A on December 1, 2024 and sell it today you would earn a total of 2,024 from holding Visa Class A or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Kentima Holding publ
Performance |
| Timeline |
| Visa Class A |
| Kentima Holding publ |
Visa and Kentima Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kentima Holding
The main advantage of trading using opposite Visa and Kentima Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kentima Holding 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 Kentima Holding will offset losses from the drop in Kentima Holding's 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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