Correlation Between Visa and Security Bank
Can any of the company-specific risk be diversified away by investing in both Visa and Security Bank 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 Security Bank 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 Security Bank Corp, you can compare the effects of market volatilities on Visa and Security Bank 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 Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Security Bank.
Diversification Opportunities for Visa and Security Bank
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Security is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp 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 Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Visa i.e., Visa and Security Bank go up and down completely randomly.
Pair Corralation between Visa and Security Bank
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.46 times more return on investment than Security Bank. However, Visa Class A is 2.19 times less risky than Security Bank. It trades about 0.35 of its potential returns per unit of risk. Security Bank Corp is currently generating about -0.06 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Security Bank Corp
Performance |
| Timeline |
| Visa Class A |
| Security Bank Corp |
Visa and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Security Bank
The main advantage of trading using opposite Visa and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Security Bank vs. Metropolitan Bank Trust | Security Bank vs. Philippine National Bank | Security Bank vs. Asia United Bank | Security Bank vs. Philippine Savings Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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