Correlation Between Visa and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Visa and Aqr Global 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 Aqr Global 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 Aqr Global Macro, you can compare the effects of market volatilities on Visa and Aqr Global 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 Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Aqr Global.
Diversification Opportunities for Visa and Aqr Global
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Aqr is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Aqr Global Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Macro 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 Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Macro has no effect on the direction of Visa i.e., Visa and Aqr Global go up and down completely randomly.
Pair Corralation between Visa and Aqr Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.85 times more return on investment than Aqr Global. However, Visa is 1.85 times more volatile than Aqr Global Macro. It trades about 0.09 of its potential returns per unit of risk. Aqr Global Macro is currently generating about 0.01 per unit of risk. If you would invest 25,380 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 6,285 from holding Visa Class A or generate 24.76% 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. Aqr Global Macro
Performance |
| Timeline |
| Visa Class A |
| Aqr Global Macro |
Visa and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Aqr Global
The main advantage of trading using opposite Visa and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Aqr Global 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 Aqr Global will offset losses from the drop in Aqr Global's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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