Correlation Between Visa and Nationwide Core
Can any of the company-specific risk be diversified away by investing in both Visa and Nationwide Core 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 Nationwide Core 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 Nationwide E Plus, you can compare the effects of market volatilities on Visa and Nationwide Core 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 Nationwide Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Nationwide Core.
Diversification Opportunities for Visa and Nationwide Core
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Nationwide is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nationwide E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide E Plus 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 Nationwide Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide E Plus has no effect on the direction of Visa i.e., Visa and Nationwide Core go up and down completely randomly.
Pair Corralation between Visa and Nationwide Core
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.44 times more return on investment than Nationwide Core. However, Visa is 2.44 times more volatile than Nationwide E Plus. It trades about 0.1 of its potential returns per unit of risk. Nationwide E Plus is currently generating about 0.05 per unit of risk. If you would invest 22,355 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 9,153 from holding Visa Class A or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Nationwide E Plus
Performance |
| Timeline |
| Visa Class A |
| Nationwide E Plus |
Visa and Nationwide Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Nationwide Core
The main advantage of trading using opposite Visa and Nationwide Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Nationwide Core 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 Nationwide Core will offset losses from the drop in Nationwide Core's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Nationwide Core vs. Ashmore Emerging Markets | Nationwide Core vs. Black Oak Emerging | Nationwide Core vs. Dws Emerging Markets | Nationwide Core vs. Investec Emerging Markets |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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