Correlation Between Visa and Raiffeisen Bank
Can any of the company-specific risk be diversified away by investing in both Visa and Raiffeisen Bank 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 Raiffeisen Bank 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 Raiffeisen Bank International, you can compare the effects of market volatilities on Visa and Raiffeisen Bank 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 Raiffeisen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Raiffeisen Bank.
Diversification Opportunities for Visa and Raiffeisen Bank
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and Raiffeisen is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte 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 Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of Visa i.e., Visa and Raiffeisen Bank go up and down completely randomly.
Pair Corralation between Visa and Raiffeisen Bank
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.48 times more return on investment than Raiffeisen Bank. However, Visa Class A is 2.07 times less risky than Raiffeisen Bank. It trades about 0.32 of its potential returns per unit of risk. Raiffeisen Bank International is currently generating about 0.02 per unit of risk. If you would invest 28,322 in Visa Class A on August 24, 2024 and sell it today you would earn a total of 2,668 from holding Visa Class A or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Raiffeisen Bank International
Performance |
| Timeline |
| Visa Class A |
| Raiffeisen Bank Inte |
Visa and Raiffeisen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Raiffeisen Bank
The main advantage of trading using opposite Visa and Raiffeisen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Raiffeisen Bank 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 Raiffeisen Bank will offset losses from the drop in Raiffeisen Bank's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Raiffeisen Bank vs. Vienna Insurance Group | Raiffeisen Bank vs. AGRANA Beteiligungs Aktiengesellschaft | Raiffeisen Bank vs. Voestalpine AG | Raiffeisen Bank vs. BKS Bank AG |
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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