Correlation Between Visa and Oportun Financial
Can any of the company-specific risk be diversified away by investing in both Visa and Oportun Financial 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 Oportun Financial 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 Oportun Financial Corp, you can compare the effects of market volatilities on Visa and Oportun Financial 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 Oportun Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Oportun Financial.
Diversification Opportunities for Visa and Oportun Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Oportun is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Oportun Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oportun Financial 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 Oportun Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oportun Financial Corp has no effect on the direction of Visa i.e., Visa and Oportun Financial go up and down completely randomly.
Pair Corralation between Visa and Oportun Financial
Taking into account the 90-day investment horizon Visa is expected to generate 4.93 times less return on investment than Oportun Financial. But when comparing it to its historical volatility, Visa Class A is 3.28 times less risky than Oportun Financial. It trades about 0.34 of its potential returns per unit of risk. Oportun Financial Corp is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 268.00 in Oportun Financial Corp on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Oportun Financial Corp or generate 48.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Oportun Financial Corp
Performance |
| Timeline |
| Visa Class A |
| Oportun Financial Corp |
Visa and Oportun Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Oportun Financial
The main advantage of trading using opposite Visa and Oportun Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Oportun Financial 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 Oportun Financial will offset losses from the drop in Oportun Financial's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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