Correlation Between Visa and Multiconsult
Can any of the company-specific risk be diversified away by investing in both Visa and Multiconsult 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 Multiconsult 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 Multiconsult AS, you can compare the effects of market volatilities on Visa and Multiconsult 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 Multiconsult. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Multiconsult.
Diversification Opportunities for Visa and Multiconsult
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and Multiconsult is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Multiconsult AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multiconsult AS 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 Multiconsult. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multiconsult AS has no effect on the direction of Visa i.e., Visa and Multiconsult go up and down completely randomly.
Pair Corralation between Visa and Multiconsult
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.39 times more return on investment than Multiconsult. However, Visa Class A is 2.57 times less risky than Multiconsult. It trades about 0.26 of its potential returns per unit of risk. Multiconsult AS is currently generating about -0.17 per unit of risk. If you would invest 33,398 in Visa Class A on November 27, 2024 and sell it today you would earn a total of 1,455 from holding Visa Class A or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. Multiconsult AS
Performance |
| Timeline |
| Visa Class A |
| Multiconsult AS |
Visa and Multiconsult Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Multiconsult
The main advantage of trading using opposite Visa and Multiconsult positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Multiconsult 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 Multiconsult will offset losses from the drop in Multiconsult's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Multiconsult vs. Kitron ASA | Multiconsult vs. Veidekke ASA | Multiconsult vs. Europris ASA | Multiconsult vs. AF Gruppen ASA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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