Correlation Between Visa and Al Khair
Can any of the company-specific risk be diversified away by investing in both Visa and Al Khair 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 Al Khair 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 Al Khair River, you can compare the effects of market volatilities on Visa and Al Khair 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 Al Khair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Al Khair.
Diversification Opportunities for Visa and Al Khair
Poor diversification
The 3 months correlation between Visa and KRDI is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Al Khair River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Khair River 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 Al Khair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Khair River has no effect on the direction of Visa i.e., Visa and Al Khair go up and down completely randomly.
Pair Corralation between Visa and Al Khair
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.33 times more return on investment than Al Khair. However, Visa Class A is 3.01 times less risky than Al Khair. It trades about 0.29 of its potential returns per unit of risk. Al Khair River is currently generating about 0.05 per unit of risk. If you would invest 33,392 in Visa Class A on November 29, 2024 and sell it today you would earn a total of 1,671 from holding Visa Class A or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Visa Class A vs. Al Khair River
Performance |
| Timeline |
| Visa Class A |
| Al Khair River |
Visa and Al Khair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Al Khair
The main advantage of trading using opposite Visa and Al Khair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Al Khair 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 Al Khair will offset losses from the drop in Al Khair's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Al Khair vs. Lotus For Agricultural | Al Khair vs. Atlas For Investment | Al Khair vs. Nozha International Hospital | Al Khair vs. Egyptians For Investment |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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