Correlation Between Visa and Kjell Group
Can any of the company-specific risk be diversified away by investing in both Visa and Kjell Group 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 Kjell Group 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 Kjell Group AB, you can compare the effects of market volatilities on Visa and Kjell Group 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 Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kjell Group.
Diversification Opportunities for Visa and Kjell Group
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Kjell is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kjell Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kjell Group AB 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 Kjell Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kjell Group AB has no effect on the direction of Visa i.e., Visa and Kjell Group go up and down completely randomly.
Pair Corralation between Visa and Kjell Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.38 times more return on investment than Kjell Group. However, Visa Class A is 2.63 times less risky than Kjell Group. It trades about 0.35 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.33 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Visa Class A vs. Kjell Group AB
Performance |
| Timeline |
| Visa Class A |
| Kjell Group AB |
Visa and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kjell Group
The main advantage of trading using opposite Visa and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kjell Group 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 Kjell Group will offset losses from the drop in Kjell Group'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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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