Correlation Between Visa and Kingsmen Creatives
Can any of the company-specific risk be diversified away by investing in both Visa and Kingsmen Creatives 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 Kingsmen Creatives 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 Kingsmen Creatives, you can compare the effects of market volatilities on Visa and Kingsmen Creatives 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 Kingsmen Creatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kingsmen Creatives.
Diversification Opportunities for Visa and Kingsmen Creatives
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Kingsmen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kingsmen Creatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen Creatives 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 Kingsmen Creatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen Creatives has no effect on the direction of Visa i.e., Visa and Kingsmen Creatives go up and down completely randomly.
Pair Corralation between Visa and Kingsmen Creatives
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.18 times more return on investment than Kingsmen Creatives. However, Visa Class A is 5.56 times less risky than Kingsmen Creatives. It trades about 0.13 of its potential returns per unit of risk. Kingsmen Creatives is currently generating about -0.22 per unit of risk. If you would invest 31,185 in Visa Class A on September 20, 2024 and sell it today you would earn a total of 645.00 from holding Visa Class A or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Kingsmen Creatives
Performance |
| Timeline |
| Visa Class A |
| Kingsmen Creatives |
Visa and Kingsmen Creatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kingsmen Creatives
The main advantage of trading using opposite Visa and Kingsmen Creatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kingsmen Creatives 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 Kingsmen Creatives will offset losses from the drop in Kingsmen Creatives' long position.The idea behind Visa Class A and Kingsmen Creatives pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kingsmen Creatives vs. Mid Atlantic Home Health | Kingsmen Creatives vs. CapitaLand Investment Limited | Kingsmen Creatives vs. SEI Investments | Kingsmen Creatives vs. SL Green Realty |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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