Correlation Between Visa and Reitmans
Can any of the company-specific risk be diversified away by investing in both Visa and Reitmans 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 Reitmans 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 Reitmans Limited, you can compare the effects of market volatilities on Visa and Reitmans 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 Reitmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Reitmans.
Diversification Opportunities for Visa and Reitmans
Excellent diversification
The 3 months correlation between Visa and Reitmans is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans Limited 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 Reitmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans Limited has no effect on the direction of Visa i.e., Visa and Reitmans go up and down completely randomly.
Pair Corralation between Visa and Reitmans
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.3 times more return on investment than Reitmans. However, Visa Class A is 3.3 times less risky than Reitmans. It trades about 0.09 of its potential returns per unit of risk. Reitmans Limited is currently generating about -0.01 per unit of risk. If you would invest 31,488 in Visa Class A on October 20, 2024 and sell it today you would earn a total of 474.00 from holding Visa Class A or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Visa Class A vs. Reitmans Limited
Performance |
| Timeline |
| Visa Class A |
| Reitmans Limited |
Visa and Reitmans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Reitmans
The main advantage of trading using opposite Visa and Reitmans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Reitmans 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 Reitmans will offset losses from the drop in Reitmans' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Reitmans vs. Supremex | Reitmans vs. Inventronics | Reitmans vs. Redishred Capital Corp | Reitmans vs. Taiga Building Products |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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