Correlation Between Visa and NEOS Nasdaq
Can any of the company-specific risk be diversified away by investing in both Visa and NEOS Nasdaq 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 NEOS Nasdaq 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 NEOS Nasdaq 100, you can compare the effects of market volatilities on Visa and NEOS Nasdaq 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 NEOS Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NEOS Nasdaq.
Diversification Opportunities for Visa and NEOS Nasdaq
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and NEOS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NEOS Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS Nasdaq 100 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 NEOS Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS Nasdaq 100 has no effect on the direction of Visa i.e., Visa and NEOS Nasdaq go up and down completely randomly.
Pair Corralation between Visa and NEOS Nasdaq
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.14 times more return on investment than NEOS Nasdaq. However, Visa is 1.14 times more volatile than NEOS Nasdaq 100. It trades about 0.09 of its potential returns per unit of risk. NEOS Nasdaq 100 is currently generating about 0.09 per unit of risk. If you would invest 20,975 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 10,690 from holding Visa Class A or generate 50.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.03% |
| Values | Daily Returns |
Visa Class A vs. NEOS Nasdaq 100
Performance |
| Timeline |
| Visa Class A |
| NEOS Nasdaq 100 |
Visa and NEOS Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NEOS Nasdaq
The main advantage of trading using opposite Visa and NEOS Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NEOS Nasdaq 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 NEOS Nasdaq will offset losses from the drop in NEOS Nasdaq's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| NEOS Nasdaq vs. Global X SP | NEOS Nasdaq vs. Global X NASDAQ | NEOS Nasdaq vs. NEOS ETF Trust | NEOS Nasdaq vs. JPMorgan Equity Premium |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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