Correlation Between Visa and OFX Group
Can any of the company-specific risk be diversified away by investing in both Visa and OFX 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 OFX 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 OFX Group Ltd, you can compare the effects of market volatilities on Visa and OFX 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 OFX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and OFX Group.
Diversification Opportunities for Visa and OFX Group
Poor diversification
The 3 months correlation between Visa and OFX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and OFX Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFX Group 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 OFX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFX Group has no effect on the direction of Visa i.e., Visa and OFX Group go up and down completely randomly.
Pair Corralation between Visa and OFX Group
If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. OFX Group Ltd
Performance |
| Timeline |
| Visa Class A |
| OFX Group |
Visa and OFX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and OFX Group
The main advantage of trading using opposite Visa and OFX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, OFX 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 OFX Group will offset losses from the drop in OFX Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| OFX Group vs. Bel Fuse A | OFX Group vs. Nextplat Corp | OFX Group vs. Semtech | OFX Group vs. Nextnav Acquisition Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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