Correlation Between Visa and Nava Nakorn
Can any of the company-specific risk be diversified away by investing in both Visa and Nava Nakorn 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 Nava Nakorn 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 Nava Nakorn Public, you can compare the effects of market volatilities on Visa and Nava Nakorn 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 Nava Nakorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Nava Nakorn.
Diversification Opportunities for Visa and Nava Nakorn
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Nava is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nava Nakorn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nava Nakorn Public 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 Nava Nakorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nava Nakorn Public has no effect on the direction of Visa i.e., Visa and Nava Nakorn go up and down completely randomly.
Pair Corralation between Visa and Nava Nakorn
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.5 times more return on investment than Nava Nakorn. However, Visa Class A is 2.0 times less risky than Nava Nakorn. It trades about 0.11 of its potential returns per unit of risk. Nava Nakorn Public is currently generating about -0.18 per unit of risk. If you would invest 30,985 in Visa Class A on September 13, 2024 and sell it today you would earn a total of 554.50 from holding Visa Class A or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Visa Class A vs. Nava Nakorn Public
Performance |
| Timeline |
| Visa Class A |
| Nava Nakorn Public |
Visa and Nava Nakorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Nava Nakorn
The main advantage of trading using opposite Visa and Nava Nakorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Nava Nakorn 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 Nava Nakorn will offset losses from the drop in Nava Nakorn's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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