Correlation Between Visa and Medistim ASA
Can any of the company-specific risk be diversified away by investing in both Visa and Medistim ASA 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 Medistim ASA 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 Medistim ASA, you can compare the effects of market volatilities on Visa and Medistim ASA 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 Medistim ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Medistim ASA.
Diversification Opportunities for Visa and Medistim ASA
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Medistim is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Medistim ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medistim ASA 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 Medistim ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medistim ASA has no effect on the direction of Visa i.e., Visa and Medistim ASA go up and down completely randomly.
Pair Corralation between Visa and Medistim ASA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.48 times more return on investment than Medistim ASA. However, Visa Class A is 2.08 times less risky than Medistim ASA. It trades about 0.07 of its potential returns per unit of risk. Medistim ASA is currently generating about -0.04 per unit of risk. If you would invest 27,777 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 3,731 from holding Visa Class A or generate 13.43% 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. Medistim ASA
Performance |
| Timeline |
| Visa Class A |
| Medistim ASA |
Visa and Medistim ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Medistim ASA
The main advantage of trading using opposite Visa and Medistim ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Medistim ASA 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 Medistim ASA will offset losses from the drop in Medistim ASA's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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