Correlation Between Visa and Imerys SA
Can any of the company-specific risk be diversified away by investing in both Visa and Imerys SA 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 Imerys SA 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 Imerys SA, you can compare the effects of market volatilities on Visa and Imerys SA 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 Imerys SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Imerys SA.
Diversification Opportunities for Visa and Imerys SA
Very good diversification
The 3 months correlation between Visa and Imerys is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Imerys SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imerys SA 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 Imerys SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imerys SA has no effect on the direction of Visa i.e., Visa and Imerys SA go up and down completely randomly.
Pair Corralation between Visa and Imerys SA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.46 times more return on investment than Imerys SA. However, Visa Class A is 2.16 times less risky than Imerys SA. It trades about 0.21 of its potential returns per unit of risk. Imerys SA is currently generating about -0.04 per unit of risk. If you would invest 28,365 in Visa Class A on October 26, 2024 and sell it today you would earn a total of 3,991 from holding Visa Class A or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.72% |
| Values | Daily Returns |
Visa Class A vs. Imerys SA
Performance |
| Timeline |
| Visa Class A |
| Imerys SA |
Visa and Imerys SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Imerys SA
The main advantage of trading using opposite Visa and Imerys SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Imerys SA 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 Imerys SA will offset losses from the drop in Imerys SA's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Imerys SA vs. Rubis SCA | Imerys SA vs. Eramet SA | Imerys SA vs. Nexity | Imerys SA vs. Compagnie de Saint Gobain |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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