Correlation Between Visa and MFS Active
Can any of the company-specific risk be diversified away by investing in both Visa and MFS Active 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 MFS Active 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 MFS Active Exchange, you can compare the effects of market volatilities on Visa and MFS Active 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 MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and MFS Active.
Diversification Opportunities for Visa and MFS Active
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and MFS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and MFS Active Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Exchange 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 MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active Exchange has no effect on the direction of Visa i.e., Visa and MFS Active go up and down completely randomly.
Pair Corralation between Visa and MFS Active
Taking into account the 90-day investment horizon Visa Class A is expected to generate 5.46 times more return on investment than MFS Active. However, Visa is 5.46 times more volatile than MFS Active Exchange. It trades about 0.09 of its potential returns per unit of risk. MFS Active Exchange is currently generating about -0.42 per unit of risk. If you would invest 30,830 in Visa Class A on October 9, 2024 and sell it today you would earn a total of 474.00 from holding Visa Class A or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. MFS Active Exchange
Performance |
| Timeline |
| Visa Class A |
| MFS Active Exchange |
Visa and MFS Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and MFS Active
The main advantage of trading using opposite Visa and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, MFS Active 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 MFS Active will offset losses from the drop in MFS Active's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| MFS Active vs. Vanguard Total Stock | MFS Active vs. SPDR SP 500 | MFS Active vs. iShares Core SP | MFS Active vs. Vanguard Total Bond |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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