Correlation Between Visa and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Visa and Kesko Oyj 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 Kesko Oyj 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 Kesko Oyj ADR, you can compare the effects of market volatilities on Visa and Kesko Oyj 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 Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kesko Oyj.
Diversification Opportunities for Visa and Kesko Oyj
Very good diversification
The 3 months correlation between Visa and Kesko is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR 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 Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Visa i.e., Visa and Kesko Oyj go up and down completely randomly.
Pair Corralation between Visa and Kesko Oyj
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.61 times more return on investment than Kesko Oyj. However, Visa Class A is 1.64 times less risky than Kesko Oyj. It trades about 0.44 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.04 per unit of risk. If you would invest 31,440 in Visa Class A on November 3, 2024 and sell it today you would earn a total of 2,740 from holding Visa Class A or generate 8.72% 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. Kesko Oyj ADR
Performance |
| Timeline |
| Visa Class A |
| Kesko Oyj ADR |
Visa and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kesko Oyj
The main advantage of trading using opposite Visa and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury plc | Kesko Oyj vs. Om Holdings International | Kesko Oyj vs. J Sainsbury PLC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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