Correlation Between Visa and Kunlun Energy
Can any of the company-specific risk be diversified away by investing in both Visa and Kunlun Energy 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 Kunlun Energy 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 Kunlun Energy, you can compare the effects of market volatilities on Visa and Kunlun Energy 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 Kunlun Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kunlun Energy.
Diversification Opportunities for Visa and Kunlun Energy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Kunlun is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kunlun Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunlun Energy 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 Kunlun Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunlun Energy has no effect on the direction of Visa i.e., Visa and Kunlun Energy go up and down completely randomly.
Pair Corralation between Visa and Kunlun Energy
If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Kunlun Energy
Performance |
| Timeline |
| Visa Class A |
| Kunlun Energy |
Visa and Kunlun Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kunlun Energy
The main advantage of trading using opposite Visa and Kunlun Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Kunlun Energy 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 Kunlun Energy will offset losses from the drop in Kunlun Energy's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Kunlun Energy vs. Bill Com Holdings | Kunlun Energy vs. Chemours Co | Kunlun Energy vs. Rumble Inc | Kunlun Energy vs. Parker Hannifin |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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