Correlation Between Visa and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Visa and Strategic Asset 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 Strategic Asset 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 Strategic Asset Management, you can compare the effects of market volatilities on Visa and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Strategic Asset.
Diversification Opportunities for Visa and Strategic Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Strategic is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Visa i.e., Visa and Strategic Asset go up and down completely randomly.
Pair Corralation between Visa and Strategic Asset
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.91 times more return on investment than Strategic Asset. However, Visa is 2.91 times more volatile than Strategic Asset Management. It trades about 0.09 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.1 per unit of risk. If you would invest 23,481 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 7,511 from holding Visa Class A or generate 31.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Strategic Asset Management
Performance |
| Timeline |
| Visa Class A |
| Strategic Asset Mana |
Visa and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Strategic Asset
The main advantage of trading using opposite Visa and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. International Equity Index |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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