Correlation Between Visa and Sinopec Kantons
Can any of the company-specific risk be diversified away by investing in both Visa and Sinopec Kantons 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 Sinopec Kantons 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 Sinopec Kantons Holdings, you can compare the effects of market volatilities on Visa and Sinopec Kantons 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 Sinopec Kantons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sinopec Kantons.
Diversification Opportunities for Visa and Sinopec Kantons
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Sinopec is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sinopec Kantons Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Kantons Holdings 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 Sinopec Kantons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Kantons Holdings has no effect on the direction of Visa i.e., Visa and Sinopec Kantons go up and down completely randomly.
Pair Corralation between Visa and Sinopec Kantons
Taking into account the 90-day investment horizon Visa is expected to generate 5.21 times less return on investment than Sinopec Kantons. But when comparing it to its historical volatility, Visa Class A is 4.33 times less risky than Sinopec Kantons. It trades about 0.09 of its potential returns per unit of risk. Sinopec Kantons Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Sinopec Kantons Holdings on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Sinopec Kantons Holdings or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Visa Class A vs. Sinopec Kantons Holdings
Performance |
| Timeline |
| Visa Class A |
| Sinopec Kantons Holdings |
Visa and Sinopec Kantons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Sinopec Kantons
The main advantage of trading using opposite Visa and Sinopec Kantons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Sinopec Kantons 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 Sinopec Kantons will offset losses from the drop in Sinopec Kantons' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Sinopec Kantons vs. DIVERSIFIED ROYALTY | Sinopec Kantons vs. Corporate Office Properties | Sinopec Kantons vs. Chuangs China Investments | Sinopec Kantons vs. CDL INVESTMENT |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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