Correlation Between Visa and Lumina Gold
Can any of the company-specific risk be diversified away by investing in both Visa and Lumina Gold 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 Lumina Gold 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 Lumina Gold Corp, you can compare the effects of market volatilities on Visa and Lumina Gold 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 Lumina Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Lumina Gold.
Diversification Opportunities for Visa and Lumina Gold
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Lumina is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Lumina Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumina Gold Corp 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 Lumina Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumina Gold Corp has no effect on the direction of Visa i.e., Visa and Lumina Gold go up and down completely randomly.
Pair Corralation between Visa and Lumina Gold
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.38 times more return on investment than Lumina Gold. However, Visa Class A is 2.6 times less risky than Lumina Gold. It trades about 0.1 of its potential returns per unit of risk. Lumina Gold Corp is currently generating about -0.02 per unit of risk. If you would invest 27,139 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 4,043 from holding Visa Class A or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Visa Class A vs. Lumina Gold Corp
Performance |
| Timeline |
| Visa Class A |
| Lumina Gold Corp |
Visa and Lumina Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Lumina Gold
The main advantage of trading using opposite Visa and Lumina Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Lumina Gold 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 Lumina Gold will offset losses from the drop in Lumina Gold'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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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