Correlation Between Visa and Mkango Resources

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Visa and Mkango Resources 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 Mkango Resources 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 Mkango Resources, you can compare the effects of market volatilities on Visa and Mkango Resources 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 Mkango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mkango Resources.

Diversification Opportunities for Visa and Mkango Resources

VisaMkangoDiversified AwayVisaMkangoDiversified Away100%
0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Visa and Mkango is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mkango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mkango Resources 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 Mkango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mkango Resources has no effect on the direction of Visa i.e., Visa and Mkango Resources go up and down completely randomly.

Pair Corralation between Visa and Mkango Resources

Taking into account the 90-day investment horizon Visa is expected to generate 2.43 times less return on investment than Mkango Resources. But when comparing it to its historical volatility, Visa Class A is 4.97 times less risky than Mkango Resources. It trades about 0.33 of its potential returns per unit of risk. Mkango Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  875.00  in Mkango Resources on November 30, 2024 and sell it today you would earn a total of  125.00  from holding Mkango Resources or generate 14.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Visa Class A  vs.  Mkango Resources

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 020406080
JavaScript chart by amCharts 3.21.15V MKA
       Timeline  
Visa Class A 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb310320330340350360
Mkango Resources 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Mkango Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Mkango Resources exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFeb789101112

Visa and Mkango Resources Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.66-1.99-1.32-0.660.01110.761.522.283.04 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15V MKA
       Returns  

Pair Trading with Visa and Mkango Resources

The main advantage of trading using opposite Visa and Mkango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Mkango Resources 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 Mkango Resources will offset losses from the drop in Mkango Resources' long position.
The idea behind Visa Class A and Mkango Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Fundamental Analysis
View fundamental data based on most recent published financial statements
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity