Correlation Between Visa and MainStay CBRE
Can any of the company-specific risk be diversified away by investing in both Visa and MainStay CBRE 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 MainStay CBRE 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 MainStay CBRE Global, you can compare the effects of market volatilities on Visa and MainStay CBRE 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 MainStay CBRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and MainStay CBRE.
Diversification Opportunities for Visa and MainStay CBRE
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and MainStay is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and MainStay CBRE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MainStay CBRE Global 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 MainStay CBRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MainStay CBRE Global has no effect on the direction of Visa i.e., Visa and MainStay CBRE go up and down completely randomly.
Pair Corralation between Visa and MainStay CBRE
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.16 times more return on investment than MainStay CBRE. However, Visa is 1.16 times more volatile than MainStay CBRE Global. It trades about 0.33 of its potential returns per unit of risk. MainStay CBRE Global is currently generating about -0.22 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. MainStay CBRE Global
Performance |
| Timeline |
| Visa Class A |
| MainStay CBRE Global |
Visa and MainStay CBRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and MainStay CBRE
The main advantage of trading using opposite Visa and MainStay CBRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, MainStay CBRE 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 MainStay CBRE will offset losses from the drop in MainStay CBRE'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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