Correlation Between Visa and National Grid
Can any of the company-specific risk be diversified away by investing in both Visa and National Grid 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 National Grid 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 National Grid Plc, you can compare the effects of market volatilities on Visa and National Grid 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 National Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and National Grid.
Diversification Opportunities for Visa and National Grid
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and National Grid Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Grid Plc 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 National Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Grid Plc has no effect on the direction of Visa i.e., Visa and National Grid go up and down completely randomly.
Pair Corralation between Visa and National Grid
If you would invest 31,101 in Visa Class A on October 7, 2024 and sell it today you would earn a total of 390.00 from holding Visa Class A or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Visa Class A vs. National Grid Plc
Performance |
| Timeline |
| Visa Class A |
| National Grid Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and National Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and National Grid
The main advantage of trading using opposite Visa and National Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, National Grid 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 National Grid will offset losses from the drop in National Grid's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| National Grid vs. BJs Restaurants | National Grid vs. Schnitzer Steel Industries | National Grid vs. China Resources Beer | National Grid vs. NEW MILLENNIUM IRON |
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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