Correlation Between Visa and Manila Mining
Can any of the company-specific risk be diversified away by investing in both Visa and Manila Mining 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 Manila Mining 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 Manila Mining Corp, you can compare the effects of market volatilities on Visa and Manila Mining 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 Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Manila Mining.
Diversification Opportunities for Visa and Manila Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Manila is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining 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 Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of Visa i.e., Visa and Manila Mining go up and down completely randomly.
Pair Corralation between Visa and Manila Mining
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.2 times more return on investment than Manila Mining. However, Visa Class A is 5.0 times less risky than Manila Mining. It trades about 0.11 of its potential returns per unit of risk. Manila Mining Corp is currently generating about -0.04 per unit of risk. If you would invest 21,122 in Visa Class A on December 1, 2024 and sell it today you would earn a total of 15,149 from holding Visa Class A or generate 71.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 44.53% |
| Values | Daily Returns |
Visa Class A vs. Manila Mining Corp
Performance |
| Timeline |
| Visa Class A |
| Manila Mining Corp |
Visa and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Manila Mining
The main advantage of trading using opposite Visa and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Manila Mining 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 Manila Mining will offset losses from the drop in Manila Mining's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Manila Mining vs. Apex Mining Co | Manila Mining vs. Lepanto Consolidated Mining | Manila Mining vs. Converge Information Communications | Manila Mining vs. Swift Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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