Correlation Between Visa and SCOR SE
Can any of the company-specific risk be diversified away by investing in both Visa and SCOR SE 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 SCOR SE 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 SCOR SE, you can compare the effects of market volatilities on Visa and SCOR SE 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 SCOR SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and SCOR SE.
Diversification Opportunities for Visa and SCOR SE
Poor diversification
The 3 months correlation between Visa and SCOR is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE 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 SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of Visa i.e., Visa and SCOR SE go up and down completely randomly.
Pair Corralation between Visa and SCOR SE
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.44 times more return on investment than SCOR SE. However, Visa Class A is 2.26 times less risky than SCOR SE. It trades about 0.09 of its potential returns per unit of risk. SCOR SE is currently generating about 0.03 per unit of risk. If you would invest 22,629 in Visa Class A on November 5, 2024 and sell it today you would earn a total of 11,551 from holding Visa Class A or generate 51.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.6% |
| Values | Daily Returns |
Visa Class A vs. SCOR SE
Performance |
| Timeline |
| Visa Class A |
| SCOR SE |
Visa and SCOR SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and SCOR SE
The main advantage of trading using opposite Visa and SCOR SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, SCOR SE 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 SCOR SE will offset losses from the drop in SCOR SE's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Upstart Holdings | Visa vs. Capital One Financial |
| SCOR SE vs. SIDETRADE EO 1 | SCOR SE vs. FAST RETAIL ADR | SCOR SE vs. Renesas Electronics | SCOR SE vs. KIMBALL ELECTRONICS |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |