Correlation Between Visa and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both Visa and CANEX Metals 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 CANEX Metals 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 CANEX Metals, you can compare the effects of market volatilities on Visa and CANEX Metals 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 CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CANEX Metals.
Diversification Opportunities for Visa and CANEX Metals
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and CANEX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals 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 CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of Visa i.e., Visa and CANEX Metals go up and down completely randomly.
Pair Corralation between Visa and CANEX Metals
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.91 times more return on investment than CANEX Metals. However, Visa is 2.91 times more volatile than CANEX Metals. It trades about 0.45 of its potential returns per unit of risk. CANEX Metals is currently generating about -0.22 per unit of risk. If you would invest 31,440 in Visa Class A on November 3, 2024 and sell it today you would earn a total of 2,740 from holding Visa Class A or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. CANEX Metals
Performance |
| Timeline |
| Visa Class A |
| CANEX Metals |
Visa and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CANEX Metals
The main advantage of trading using opposite Visa and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CANEX Metals 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 CANEX Metals will offset losses from the drop in CANEX Metals' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| CANEX Metals vs. Antioquia Gold | CANEX Metals vs. Radisson Mining Resources | CANEX Metals vs. Asante Gold | CANEX Metals vs. Baru Gold Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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