Correlation Between Visa and PepperLime Health
Can any of the company-specific risk be diversified away by investing in both Visa and PepperLime Health 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 PepperLime Health 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 PepperLime Health Acquisition, you can compare the effects of market volatilities on Visa and PepperLime Health 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 PepperLime Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PepperLime Health.
Diversification Opportunities for Visa and PepperLime Health
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Visa and PepperLime is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PepperLime Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepperLime Health 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 PepperLime Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepperLime Health has no effect on the direction of Visa i.e., Visa and PepperLime Health go up and down completely randomly.
Pair Corralation between Visa and PepperLime Health
Taking into account the 90-day investment horizon Visa Class A is expected to generate 3.9 times more return on investment than PepperLime Health. However, Visa is 3.9 times more volatile than PepperLime Health Acquisition. It trades about 0.08 of its potential returns per unit of risk. PepperLime Health Acquisition is currently generating about 0.08 per unit of risk. If you would invest 21,956 in Visa Class A on October 7, 2024 and sell it today you would earn a total of 9,535 from holding Visa Class A or generate 43.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 26.21% |
| Values | Daily Returns |
Visa Class A vs. PepperLime Health Acquisition
Performance |
| Timeline |
| Visa Class A |
| PepperLime Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and PepperLime Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PepperLime Health
The main advantage of trading using opposite Visa and PepperLime Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PepperLime Health 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 PepperLime Health will offset losses from the drop in PepperLime Health's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| PepperLime Health vs. Hudson Acquisition I | PepperLime Health vs. Alpha One | PepperLime Health vs. Manaris Corp | PepperLime Health vs. Marblegate 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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