Correlation Between Visa and Ocado Group
Can any of the company-specific risk be diversified away by investing in both Visa and Ocado Group 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 Ocado Group 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 Ocado Group plc, you can compare the effects of market volatilities on Visa and Ocado Group 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 Ocado Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ocado Group.
Diversification Opportunities for Visa and Ocado Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Ocado is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ocado Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocado Group 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 Ocado Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocado Group plc has no effect on the direction of Visa i.e., Visa and Ocado Group go up and down completely randomly.
Pair Corralation between Visa and Ocado Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.71 times more return on investment than Ocado Group. However, Visa Class A is 1.41 times less risky than Ocado Group. It trades about 0.37 of its potential returns per unit of risk. Ocado Group plc is currently generating about -0.51 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Ocado Group plc
Performance |
| Timeline |
| Visa Class A |
| Ocado Group plc |
Visa and Ocado Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ocado Group
The main advantage of trading using opposite Visa and Ocado Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Ocado Group 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 Ocado Group will offset losses from the drop in Ocado Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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