Correlation Between Visa and PetroChina
Can any of the company-specific risk be diversified away by investing in both Visa and PetroChina 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 PetroChina 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 PetroChina Co Ltd, you can compare the effects of market volatilities on Visa and PetroChina 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 PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PetroChina.
Diversification Opportunities for Visa and PetroChina
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and PetroChina is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina 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 PetroChina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina has no effect on the direction of Visa i.e., Visa and PetroChina go up and down completely randomly.
Pair Corralation between Visa and PetroChina
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.51 times more return on investment than PetroChina. However, Visa Class A is 1.96 times less risky than PetroChina. It trades about 0.37 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.01 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. PetroChina Co Ltd
Performance |
| Timeline |
| Visa Class A |
| PetroChina |
Visa and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PetroChina
The main advantage of trading using opposite Visa and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PetroChina 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 PetroChina will offset losses from the drop in PetroChina's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| PetroChina vs. Equinor ASA ADR | PetroChina vs. TotalEnergies SE ADR | PetroChina vs. Ecopetrol SA ADR | PetroChina vs. National Fuel Gas |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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