Correlation Between Visa and Meitav Trade
Can any of the company-specific risk be diversified away by investing in both Visa and Meitav Trade 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 Meitav Trade 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 Meitav Trade Inv, you can compare the effects of market volatilities on Visa and Meitav Trade 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 Meitav Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Meitav Trade.
Diversification Opportunities for Visa and Meitav Trade
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Visa and Meitav is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Meitav Trade Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Trade Inv 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 Meitav Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Trade Inv has no effect on the direction of Visa i.e., Visa and Meitav Trade go up and down completely randomly.
Pair Corralation between Visa and Meitav Trade
Taking into account the 90-day investment horizon Visa is expected to generate 2.39 times less return on investment than Meitav Trade. But when comparing it to its historical volatility, Visa Class A is 1.22 times less risky than Meitav Trade. It trades about 0.35 of its potential returns per unit of risk. Meitav Trade Inv is currently generating about 0.69 of returns per unit of risk over similar time horizon. If you would invest 961.00 in Meitav Trade Inv on September 1, 2024 and sell it today you would earn a total of 184.00 from holding Meitav Trade Inv or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 85.71% |
| Values | Daily Returns |
Visa Class A vs. Meitav Trade Inv
Performance |
| Timeline |
| Visa Class A |
| Meitav Trade Inv |
Visa and Meitav Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Meitav Trade
The main advantage of trading using opposite Visa and Meitav Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Meitav Trade 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 Meitav Trade will offset losses from the drop in Meitav Trade's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Meitav Trade vs. Nice | Meitav Trade vs. The Gold Bond | Meitav Trade vs. Bank Leumi Le Israel | Meitav Trade vs. ICL Israel Chemicals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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