Correlation Between Visa and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both Visa and Mechel OAO 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 Mechel OAO 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 Mechel OAO, you can compare the effects of market volatilities on Visa and Mechel OAO 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 Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mechel OAO.
Diversification Opportunities for Visa and Mechel OAO
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Mechel is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO 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 Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of Visa i.e., Visa and Mechel OAO go up and down completely randomly.
Pair Corralation between Visa and Mechel OAO
If you would invest 28,134 in Visa Class A on August 30, 2024 and sell it today you would earn a total of 3,336 from holding Visa Class A or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Visa Class A vs. Mechel OAO
Performance |
| Timeline |
| Visa Class A |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Mechel OAO
The main advantage of trading using opposite Visa and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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