Correlation Between Visa and KWESST Micro
Can any of the company-specific risk be diversified away by investing in both Visa and KWESST Micro 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 KWESST Micro 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 KWESST Micro Systems, you can compare the effects of market volatilities on Visa and KWESST Micro 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 KWESST Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and KWESST Micro.
Diversification Opportunities for Visa and KWESST Micro
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and KWESST is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and KWESST Micro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWESST Micro Systems 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 KWESST Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWESST Micro Systems has no effect on the direction of Visa i.e., Visa and KWESST Micro go up and down completely randomly.
Pair Corralation between Visa and KWESST Micro
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.15 times more return on investment than KWESST Micro. However, Visa Class A is 6.8 times less risky than KWESST Micro. It trades about 0.33 of its potential returns per unit of risk. KWESST Micro Systems is currently generating about -0.26 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,627 from holding Visa Class A or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. KWESST Micro Systems
Performance |
| Timeline |
| Visa Class A |
| KWESST Micro Systems |
Visa and KWESST Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and KWESST Micro
The main advantage of trading using opposite Visa and KWESST Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, KWESST Micro 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 KWESST Micro will offset losses from the drop in KWESST Micro's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| KWESST Micro vs. Ducommun Incorporated | KWESST Micro vs. Park Electrochemical | KWESST Micro vs. National Presto Industries | KWESST Micro vs. Woodward |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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