Correlation Between Visa and Bank Polska
Can any of the company-specific risk be diversified away by investing in both Visa and Bank Polska 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 Bank Polska 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 Bank Polska Kasa, you can compare the effects of market volatilities on Visa and Bank Polska 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 Bank Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Bank Polska.
Diversification Opportunities for Visa and Bank Polska
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Bank is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bank Polska Kasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Polska Kasa 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 Bank Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Polska Kasa has no effect on the direction of Visa i.e., Visa and Bank Polska go up and down completely randomly.
Pair Corralation between Visa and Bank Polska
Taking into account the 90-day investment horizon Visa is expected to generate 1.83 times less return on investment than Bank Polska. But when comparing it to its historical volatility, Visa Class A is 1.97 times less risky than Bank Polska. It trades about 0.08 of its potential returns per unit of risk. Bank Polska Kasa is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,095 in Bank Polska Kasa on August 30, 2024 and sell it today you would earn a total of 5,810 from holding Bank Polska Kasa or generate 71.77% 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. Bank Polska Kasa
Performance |
| Timeline |
| Visa Class A |
| Bank Polska Kasa |
Visa and Bank Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Bank Polska
The main advantage of trading using opposite Visa and Bank Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Bank Polska 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 Bank Polska will offset losses from the drop in Bank Polska's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Bank Polska vs. M Food SA | Bank Polska vs. Cloud Technologies SA | Bank Polska vs. Biztech Konsulting SA | Bank Polska vs. Quantum Software SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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