Correlation Between Visa and Nabtesco
Can any of the company-specific risk be diversified away by investing in both Visa and Nabtesco 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 Nabtesco 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 Nabtesco, you can compare the effects of market volatilities on Visa and Nabtesco 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 Nabtesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Nabtesco.
Diversification Opportunities for Visa and Nabtesco
Pay attention - limited upside
The 3 months correlation between Visa and Nabtesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nabtesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabtesco 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 Nabtesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabtesco has no effect on the direction of Visa i.e., Visa and Nabtesco go up and down completely randomly.
Pair Corralation between Visa and Nabtesco
Taking into account the 90-day investment horizon Visa is expected to generate 21.58 times less return on investment than Nabtesco. But when comparing it to its historical volatility, Visa Class A is 11.81 times less risky than Nabtesco. It trades about 0.08 of its potential returns per unit of risk. Nabtesco is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 796.00 in Nabtesco on September 24, 2024 and sell it today you would earn a total of 197.00 from holding Nabtesco or generate 24.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. Nabtesco
Performance |
| Timeline |
| Visa Class A |
| Nabtesco |
Visa and Nabtesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Nabtesco
The main advantage of trading using opposite Visa and Nabtesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Nabtesco 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 Nabtesco will offset losses from the drop in Nabtesco's long position.| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
| Nabtesco vs. Shapeways Holdings, Common | Nabtesco vs. JE Cleantech Holdings | Nabtesco vs. Greenland Acquisition Corp | Nabtesco vs. Laser Photonics |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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