Correlation Between Visa and PT Charlie
Can any of the company-specific risk be diversified away by investing in both Visa and PT Charlie 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 PT Charlie 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 PT Charlie Hospital, you can compare the effects of market volatilities on Visa and PT Charlie 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 PT Charlie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PT Charlie.
Diversification Opportunities for Visa and PT Charlie
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and RSCH is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PT Charlie Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Charlie Hospital 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 PT Charlie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Charlie Hospital has no effect on the direction of Visa i.e., Visa and PT Charlie go up and down completely randomly.
Pair Corralation between Visa and PT Charlie
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.49 times more return on investment than PT Charlie. However, Visa Class A is 2.04 times less risky than PT Charlie. It trades about 0.33 of its potential returns per unit of risk. PT Charlie Hospital is currently generating about -0.2 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% 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. PT Charlie Hospital
Performance |
| Timeline |
| Visa Class A |
| PT Charlie Hospital |
Visa and PT Charlie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PT Charlie
The main advantage of trading using opposite Visa and PT Charlie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PT Charlie 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 PT Charlie will offset losses from the drop in PT Charlie's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| PT Charlie vs. Bank Central Asia | PT Charlie vs. Bank Rakyat Indonesia | PT Charlie vs. Bayan Resources Tbk | PT Charlie vs. Bank Mandiri Persero |
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 CEOs Directory module to screen CEOs from public companies around the world.
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