Correlation Between Visa and MSA Safety
Can any of the company-specific risk be diversified away by investing in both Visa and MSA Safety 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 MSA Safety 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 MSA Safety Incorporated, you can compare the effects of market volatilities on Visa and MSA Safety 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 MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and MSA Safety.
Diversification Opportunities for Visa and MSA Safety
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and MSA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and MSA Safety Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of Visa i.e., Visa and MSA Safety go up and down completely randomly.
Pair Corralation between Visa and MSA Safety
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.66 times more return on investment than MSA Safety. However, Visa Class A is 1.5 times less risky than MSA Safety. It trades about 0.07 of its potential returns per unit of risk. MSA Safety Incorporated is currently generating about 0.04 per unit of risk. If you would invest 22,143 in Visa Class A on October 16, 2024 and sell it today you would earn a total of 8,766 from holding Visa Class A or generate 39.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Visa Class A vs. MSA Safety Incorporated
Performance |
| Timeline |
| Visa Class A |
| MSA Safety |
Visa and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and MSA Safety
The main advantage of trading using opposite Visa and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| MSA Safety vs. Take Two Interactive Software | MSA Safety vs. VITEC SOFTWARE GROUP | MSA Safety vs. Cars Inc | MSA Safety vs. Guangdong Investment Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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