Correlation Between Visa and Sitka Gold
Can any of the company-specific risk be diversified away by investing in both Visa and Sitka Gold 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 Sitka Gold 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 Sitka Gold Corp, you can compare the effects of market volatilities on Visa and Sitka Gold 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 Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sitka Gold.
Diversification Opportunities for Visa and Sitka Gold
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and Sitka is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold 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 Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Visa i.e., Visa and Sitka Gold go up and down completely randomly.
Pair Corralation between Visa and Sitka Gold
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.21 times more return on investment than Sitka Gold. However, Visa Class A is 4.83 times less risky than Sitka Gold. It trades about 0.34 of its potential returns per unit of risk. Sitka Gold Corp is currently generating about -0.07 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 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Sitka Gold Corp
Performance |
| Timeline |
| Visa Class A |
| Sitka Gold Corp |
Visa and Sitka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Sitka Gold
The main advantage of trading using opposite Visa and Sitka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Sitka Gold 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 Sitka Gold will offset losses from the drop in Sitka Gold's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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