Correlation Between Visa and Shoals Technologies
Can any of the company-specific risk be diversified away by investing in both Visa and Shoals Technologies 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 Shoals Technologies 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 Shoals Technologies Group, you can compare the effects of market volatilities on Visa and Shoals Technologies 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 Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Shoals Technologies.
Diversification Opportunities for Visa and Shoals Technologies
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Shoals is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals Technologies 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 Shoals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoals Technologies has no effect on the direction of Visa i.e., Visa and Shoals Technologies go up and down completely randomly.
Pair Corralation between Visa and Shoals Technologies
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.21 times more return on investment than Shoals Technologies. However, Visa Class A is 4.75 times less risky than Shoals Technologies. It trades about 0.37 of its potential returns per unit of risk. Shoals Technologies Group is currently generating about -0.01 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% 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. Shoals Technologies Group
Performance |
| Timeline |
| Visa Class A |
| Shoals Technologies |
Visa and Shoals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Shoals Technologies
The main advantage of trading using opposite Visa and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Shoals Technologies 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 Shoals Technologies will offset losses from the drop in Shoals Technologies' long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Shoals Technologies vs. 1847 Holdings LLC | Shoals Technologies vs. Westport Fuel Systems | Shoals Technologies vs. Falcons Beyond Global, | Shoals Technologies vs. Brookfield Business Partners |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |