Correlation Between Visa and KonaTel
Can any of the company-specific risk be diversified away by investing in both Visa and KonaTel 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 KonaTel 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 KonaTel, you can compare the effects of market volatilities on Visa and KonaTel 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 KonaTel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and KonaTel.
Diversification Opportunities for Visa and KonaTel
Excellent diversification
The 3 months correlation between Visa and KonaTel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and KonaTel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KonaTel 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 KonaTel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KonaTel has no effect on the direction of Visa i.e., Visa and KonaTel go up and down completely randomly.
Pair Corralation between Visa and KonaTel
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.16 times more return on investment than KonaTel. However, Visa Class A is 6.39 times less risky than KonaTel. It trades about 0.34 of its potential returns per unit of risk. KonaTel is currently generating about -0.47 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% 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. KonaTel
Performance |
| Timeline |
| Visa Class A |
| KonaTel |
Visa and KonaTel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and KonaTel
The main advantage of trading using opposite Visa and KonaTel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, KonaTel 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 KonaTel will offset losses from the drop in KonaTel's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |