Correlation Between Visa and Pact Group
Can any of the company-specific risk be diversified away by investing in both Visa and Pact 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 Pact 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 Pact Group Holdings, you can compare the effects of market volatilities on Visa and Pact 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 Pact Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Pact Group.
Diversification Opportunities for Visa and Pact Group
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Pact is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Pact Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pact Group Holdings 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 Pact Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pact Group Holdings has no effect on the direction of Visa i.e., Visa and Pact Group go up and down completely randomly.
Pair Corralation between Visa and Pact Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.91 times more return on investment than Pact Group. However, Visa Class A is 1.1 times less risky than Pact Group. It trades about 0.34 of its potential returns per unit of risk. Pact Group Holdings is currently generating about -0.07 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% 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. Pact Group Holdings
Performance |
| Timeline |
| Visa Class A |
| Pact Group Holdings |
Visa and Pact Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Pact Group
The main advantage of trading using opposite Visa and Pact Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Pact 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 Pact Group will offset losses from the drop in Pact Group's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Pact Group vs. Mirrabooka Investments | Pact Group vs. Nova Eye Medical | Pact Group vs. MFF Capital Investments | Pact Group vs. Air New Zealand |
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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