Correlation Between Visa and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Visa and OPC Energy 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 OPC Energy 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 OPC Energy, you can compare the effects of market volatilities on Visa and OPC Energy 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 OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and OPC Energy.
Diversification Opportunities for Visa and OPC Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and OPC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy 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 OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Visa i.e., Visa and OPC Energy go up and down completely randomly.
Pair Corralation between Visa and OPC Energy
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.54 times more return on investment than OPC Energy. However, Visa Class A is 1.86 times less risky than OPC Energy. It trades about 0.34 of its potential returns per unit of risk. OPC Energy is currently generating about -0.03 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Visa Class A vs. OPC Energy
Performance |
| Timeline |
| Visa Class A |
| OPC Energy |
Visa and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and OPC Energy
The main advantage of trading using opposite Visa and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| OPC Energy vs. Enlight Renewable Energy | OPC Energy vs. Energix Renewable Energies | OPC Energy vs. Alony Hetz Properties | OPC Energy vs. Ormat Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world |