Correlation Between Visa and SES SA
Can any of the company-specific risk be diversified away by investing in both Visa and SES SA 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 SES SA 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 SES SA, you can compare the effects of market volatilities on Visa and SES SA 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and SES SA.
Diversification Opportunities for Visa and SES SA
Pay attention - limited upside
The 3 months correlation between Visa and SES is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of Visa i.e., Visa and SES SA go up and down completely randomly.
Pair Corralation between Visa and SES SA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.52 times more return on investment than SES SA. However, Visa Class A is 1.92 times less risky than SES SA. It trades about 0.08 of its potential returns per unit of risk. SES SA is currently generating about -0.12 per unit of risk. If you would invest 27,616 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 3,892 from holding Visa Class A or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.65% |
| Values | Daily Returns |
Visa Class A vs. SES SA
Performance |
| Timeline |
| Visa Class A |
| SES SA |
Visa and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and SES SA
The main advantage of trading using opposite Visa and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| SES SA vs. News Corporation | SES SA vs. News Corporation | SES SA vs. Superior Plus Corp | SES SA vs. NMI Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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