Correlation Between Visa and So Carlos
Can any of the company-specific risk be diversified away by investing in both Visa and So Carlos 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 So Carlos 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 So Carlos Empreendimentos, you can compare the effects of market volatilities on Visa and So Carlos 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 So Carlos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and So Carlos.
Diversification Opportunities for Visa and So Carlos
Excellent diversification
The 3 months correlation between Visa and SCAR3 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and So Carlos Empreendimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Carlos Empreendimentos 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 So Carlos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Carlos Empreendimentos has no effect on the direction of Visa i.e., Visa and So Carlos go up and down completely randomly.
Pair Corralation between Visa and So Carlos
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.83 times more return on investment than So Carlos. However, Visa Class A is 1.21 times less risky than So Carlos. It trades about 0.35 of its potential returns per unit of risk. So Carlos Empreendimentos is currently generating about -0.31 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. So Carlos Empreendimentos
Performance |
| Timeline |
| Visa Class A |
| So Carlos Empreendimentos |
Visa and So Carlos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and So Carlos
The main advantage of trading using opposite Visa and So Carlos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, So Carlos 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 So Carlos will offset losses from the drop in So Carlos' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| So Carlos vs. EZTEC Empreendimentos e | So Carlos vs. PBG SA | So Carlos vs. LPS Brasil | So Carlos vs. Tecnisa SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |