Correlation Between Visa and Great West
Can any of the company-specific risk be diversified away by investing in both Visa and Great West 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 Great West 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 Great West Real Estate, you can compare the effects of market volatilities on Visa and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Great West.
Diversification Opportunities for Visa and Great West
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Great is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Great West Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Real 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Real has no effect on the direction of Visa i.e., Visa and Great West go up and down completely randomly.
Pair Corralation between Visa and Great West
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.88 times more return on investment than Great West. However, Visa Class A is 1.13 times less risky than Great West. It trades about 0.09 of its potential returns per unit of risk. Great West Real Estate is currently generating about 0.02 per unit of risk. If you would invest 22,413 in Visa Class A on November 1, 2024 and sell it today you would earn a total of 11,175 from holding Visa Class A or generate 49.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Great West Real Estate
Performance |
| Timeline |
| Visa Class A |
| Great West Real |
Visa and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Great West
The main advantage of trading using opposite Visa and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Great West vs. Realty Income | Great West vs. Dynex Capital | Great West vs. First Industrial Realty | Great West vs. Healthcare Realty Trust |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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