Correlation Between Visa and MFC Nichada
Can any of the company-specific risk be diversified away by investing in both Visa and MFC Nichada 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 MFC Nichada 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 MFC Nichada Thani Property, you can compare the effects of market volatilities on Visa and MFC Nichada 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 MFC Nichada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and MFC Nichada.
Diversification Opportunities for Visa and MFC Nichada
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and MFC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and MFC Nichada Thani Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Nichada Thani 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 MFC Nichada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Nichada Thani has no effect on the direction of Visa i.e., Visa and MFC Nichada go up and down completely randomly.
Pair Corralation between Visa and MFC Nichada
Taking into account the 90-day investment horizon Visa is expected to generate 23.16 times less return on investment than MFC Nichada. But when comparing it to its historical volatility, Visa Class A is 44.86 times less risky than MFC Nichada. It trades about 0.08 of its potential returns per unit of risk. MFC Nichada Thani Property is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 158.00 in MFC Nichada Thani Property on September 2, 2024 and sell it today you would earn a total of 82.00 from holding MFC Nichada Thani Property or generate 51.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.38% |
| Values | Daily Returns |
Visa Class A vs. MFC Nichada Thani Property
Performance |
| Timeline |
| Visa Class A |
| MFC Nichada Thani |
Visa and MFC Nichada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and MFC Nichada
The main advantage of trading using opposite Visa and MFC Nichada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, MFC Nichada 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 MFC Nichada will offset losses from the drop in MFC Nichada'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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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