Correlation Between Visa and Oxford Industries
Can any of the company-specific risk be diversified away by investing in both Visa and Oxford Industries 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 Oxford Industries 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 Oxford Industries, you can compare the effects of market volatilities on Visa and Oxford Industries 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 Oxford Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Oxford Industries.
Diversification Opportunities for Visa and Oxford Industries
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Oxford is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Oxford Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Industries 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 Oxford Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Industries has no effect on the direction of Visa i.e., Visa and Oxford Industries go up and down completely randomly.
Pair Corralation between Visa and Oxford Industries
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.53 times more return on investment than Oxford Industries. However, Visa Class A is 1.87 times less risky than Oxford Industries. It trades about 0.08 of its potential returns per unit of risk. Oxford Industries is currently generating about -0.02 per unit of risk. If you would invest 25,473 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 5,519 from holding Visa Class A or generate 21.67% 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. Oxford Industries
Performance |
| Timeline |
| Visa Class A |
| Oxford Industries |
Visa and Oxford Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Oxford Industries
The main advantage of trading using opposite Visa and Oxford Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Oxford Industries 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 Oxford Industries will offset losses from the drop in Oxford Industries' long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Oxford Industries vs. G III Apparel Group | Oxford Industries vs. Ermenegildo Zegna NV | Oxford Industries vs. Kontoor Brands | Oxford Industries vs. Columbia Sportswear |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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