Correlation Between Visa and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Visa and Horizon Kinetics 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 Horizon Kinetics 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 Horizon Kinetics Medical, you can compare the effects of market volatilities on Visa and Horizon Kinetics 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 Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Horizon Kinetics.
Diversification Opportunities for Visa and Horizon Kinetics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Horizon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Horizon Kinetics Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Medical 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 Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics Medical has no effect on the direction of Visa i.e., Visa and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Visa and Horizon Kinetics
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.5 times more return on investment than Horizon Kinetics. However, Visa is 1.5 times more volatile than Horizon Kinetics Medical. It trades about 0.17 of its potential returns per unit of risk. Horizon Kinetics Medical is currently generating about -0.22 per unit of risk. If you would invest 27,379 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 3,803 from holding Visa Class A or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Horizon Kinetics Medical
Performance |
| Timeline |
| Visa Class A |
| Horizon Kinetics Medical |
Visa and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Horizon Kinetics
The main advantage of trading using opposite Visa and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Horizon Kinetics 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 Horizon Kinetics will offset losses from the drop in Horizon Kinetics' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Horizon Kinetics vs. Harbor Health Care | Horizon Kinetics vs. Myriad Genetics | Horizon Kinetics vs. Genenta Science SpA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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