Correlation Between Visa and Kudelski
Can any of the company-specific risk be diversified away by investing in both Visa and Kudelski 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 Kudelski 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 Kudelski, you can compare the effects of market volatilities on Visa and Kudelski 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 Kudelski. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kudelski.
Diversification Opportunities for Visa and Kudelski
Very good diversification
The 3 months correlation between Visa and Kudelski is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kudelski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kudelski 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 Kudelski. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kudelski has no effect on the direction of Visa i.e., Visa and Kudelski go up and down completely randomly.
Pair Corralation between Visa and Kudelski
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.51 times more return on investment than Kudelski. However, Visa Class A is 1.95 times less risky than Kudelski. It trades about 0.35 of its potential returns per unit of risk. Kudelski is currently generating about -0.2 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 | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Visa Class A vs. Kudelski
Performance |
| Timeline |
| Visa Class A |
| Kudelski |
Visa and Kudelski Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kudelski
The main advantage of trading using opposite Visa and Kudelski positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kudelski 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 Kudelski will offset losses from the drop in Kudelski's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Kudelski vs. Jungfraubahn Holding AG | Kudelski vs. Amsterdam Commodities NV | Kudelski vs. Flow Traders BV | Kudelski vs. ForFarmers NV |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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