Correlation Between Visa and Kopernik Global
Can any of the company-specific risk be diversified away by investing in both Visa and Kopernik Global 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 Kopernik Global 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 Kopernik Global All Cap, you can compare the effects of market volatilities on Visa and Kopernik Global 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 Kopernik Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kopernik Global.
Diversification Opportunities for Visa and Kopernik Global
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Kopernik is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kopernik Global All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik Global All 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 Kopernik Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik Global All has no effect on the direction of Visa i.e., Visa and Kopernik Global go up and down completely randomly.
Pair Corralation between Visa and Kopernik Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.26 times more return on investment than Kopernik Global. However, Visa is 1.26 times more volatile than Kopernik Global All Cap. It trades about 0.32 of its potential returns per unit of risk. Kopernik Global All Cap is currently generating about 0.31 per unit of risk. If you would invest 33,398 in Visa Class A on November 28, 2024 and sell it today you would earn a total of 1,811 from holding Visa Class A or generate 5.42% 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. Kopernik Global All Cap
Performance |
| Timeline |
| Visa Class A |
| Kopernik Global All |
Visa and Kopernik Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kopernik Global
The main advantage of trading using opposite Visa and Kopernik Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kopernik Global 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 Kopernik Global will offset losses from the drop in Kopernik Global'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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