Correlation Between Visa and Shaniv
Can any of the company-specific risk be diversified away by investing in both Visa and Shaniv 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 Shaniv 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 Shaniv, you can compare the effects of market volatilities on Visa and Shaniv 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 Shaniv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Shaniv.
Diversification Opportunities for Visa and Shaniv
Poor diversification
The 3 months correlation between Visa and Shaniv is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Shaniv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaniv 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 Shaniv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaniv has no effect on the direction of Visa i.e., Visa and Shaniv go up and down completely randomly.
Pair Corralation between Visa and Shaniv
Taking into account the 90-day investment horizon Visa is expected to generate 1.27 times less return on investment than Shaniv. But when comparing it to its historical volatility, Visa Class A is 3.33 times less risky than Shaniv. It trades about 0.44 of its potential returns per unit of risk. Shaniv is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 47,900 in Shaniv on November 3, 2024 and sell it today you would earn a total of 4,200 from holding Shaniv or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Visa Class A vs. Shaniv
Performance |
| Timeline |
| Visa Class A |
| Shaniv |
Visa and Shaniv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Shaniv
The main advantage of trading using opposite Visa and Shaniv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Shaniv 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 Shaniv will offset losses from the drop in Shaniv's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Shaniv vs. Rapac Communication Infrastructure | Shaniv vs. Shufersal | Shaniv vs. Palram | Shaniv vs. Nawi Brothers Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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