Correlation Between Visa and Nucor Corp
Can any of the company-specific risk be diversified away by investing in both Visa and Nucor Corp 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 Nucor Corp 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 Nucor Corp, you can compare the effects of market volatilities on Visa and Nucor Corp 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 Nucor Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Nucor Corp.
Diversification Opportunities for Visa and Nucor Corp
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Nucor is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nucor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor Corp 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 Nucor Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor Corp has no effect on the direction of Visa i.e., Visa and Nucor Corp go up and down completely randomly.
Pair Corralation between Visa and Nucor Corp
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.5 times more return on investment than Nucor Corp. However, Visa Class A is 1.98 times less risky than Nucor Corp. It trades about 0.1 of its potential returns per unit of risk. Nucor Corp is currently generating about -0.01 per unit of risk. If you would invest 21,764 in Visa Class A on November 9, 2024 and sell it today you would earn a total of 12,984 from holding Visa Class A or generate 59.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Nucor Corp
Performance |
| Timeline |
| Visa Class A |
| Nucor Corp |
Visa and Nucor Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Nucor Corp
The main advantage of trading using opposite Visa and Nucor Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Nucor Corp 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 Nucor Corp will offset losses from the drop in Nucor Corp's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Nucor Corp vs. United States Steel | Nucor Corp vs. Reliance Steel Aluminum | Nucor Corp vs. ArcelorMittal SA ADR | Nucor Corp vs. Commercial Metals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |