Correlation Between Visa and POT
Can any of the company-specific risk be diversified away by investing in both Visa and POT 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 POT 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 PostTelecommunication Equipment, you can compare the effects of market volatilities on Visa and POT 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 POT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and POT.
Diversification Opportunities for Visa and POT
Excellent diversification
The 3 months correlation between Visa and POT is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PostTelecommunication Equipmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostTelecommunication 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 POT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostTelecommunication has no effect on the direction of Visa i.e., Visa and POT go up and down completely randomly.
Pair Corralation between Visa and POT
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.26 times more return on investment than POT. However, Visa Class A is 3.9 times less risky than POT. It trades about 0.09 of its potential returns per unit of risk. PostTelecommunication Equipment is currently generating about 0.01 per unit of risk. If you would invest 20,311 in Visa Class A on September 14, 2024 and sell it today you would earn a total of 11,272 from holding Visa Class A or generate 55.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 73.74% |
| Values | Daily Returns |
Visa Class A vs. PostTelecommunication Equipmen
Performance |
| Timeline |
| Visa Class A |
| PostTelecommunication |
Visa and POT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and POT
The main advantage of trading using opposite Visa and POT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, POT 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 POT will offset losses from the drop in POT's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| POT vs. Vinhomes JSC | POT vs. TDG Global Investment | POT vs. Din Capital Investment | POT vs. Thanh Dat Investment |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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