Correlation Between Visa and Mowi ASA
Can any of the company-specific risk be diversified away by investing in both Visa and Mowi ASA 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 Mowi ASA 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 Mowi ASA, you can compare the effects of market volatilities on Visa and Mowi ASA 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 Mowi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mowi ASA.
Diversification Opportunities for Visa and Mowi ASA
Very weak diversification
The 3 months correlation between Visa and Mowi is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mowi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mowi ASA 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 Mowi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mowi ASA has no effect on the direction of Visa i.e., Visa and Mowi ASA go up and down completely randomly.
Pair Corralation between Visa and Mowi ASA
Taking into account the 90-day investment horizon Visa is expected to generate 5.11 times less return on investment than Mowi ASA. But when comparing it to its historical volatility, Visa Class A is 1.46 times less risky than Mowi ASA. It trades about 0.09 of its potential returns per unit of risk. Mowi ASA is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 19,600 in Mowi ASA on October 20, 2024 and sell it today you would earn a total of 1,430 from holding Mowi ASA or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Visa Class A vs. Mowi ASA
Performance |
| Timeline |
| Visa Class A |
| Mowi ASA |
Visa and Mowi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Mowi ASA
The main advantage of trading using opposite Visa and Mowi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Mowi ASA 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 Mowi ASA will offset losses from the drop in Mowi ASA'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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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