Correlation Between Visa and New Alternatives
Can any of the company-specific risk be diversified away by investing in both Visa and New Alternatives 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 New Alternatives 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 New Alternatives Fund, you can compare the effects of market volatilities on Visa and New Alternatives 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 New Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and New Alternatives.
Diversification Opportunities for Visa and New Alternatives
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and New is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and New Alternatives Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Alternatives 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 New Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Alternatives has no effect on the direction of Visa i.e., Visa and New Alternatives go up and down completely randomly.
Pair Corralation between Visa and New Alternatives
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.07 times more return on investment than New Alternatives. However, Visa is 1.07 times more volatile than New Alternatives Fund. It trades about 0.07 of its potential returns per unit of risk. New Alternatives Fund is currently generating about 0.06 per unit of risk. If you would invest 27,777 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 3,731 from holding Visa Class A or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. New Alternatives Fund
Performance |
| Timeline |
| Visa Class A |
| New Alternatives |
Visa and New Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and New Alternatives
The main advantage of trading using opposite Visa and New Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, New Alternatives 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 New Alternatives will offset losses from the drop in New Alternatives' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| New Alternatives vs. Guinness Atkinson Alternative | New Alternatives vs. Calvert Global Energy | New Alternatives vs. Portfolio 21 Global | New Alternatives vs. Green Century Balanced |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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