Correlation Between Visa and Spark Power
Can any of the company-specific risk be diversified away by investing in both Visa and Spark Power 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 Spark Power 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 Spark Power Group, you can compare the effects of market volatilities on Visa and Spark Power 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 Spark Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Spark Power.
Diversification Opportunities for Visa and Spark Power
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Spark is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Spark Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Power Group 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 Spark Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Power Group has no effect on the direction of Visa i.e., Visa and Spark Power go up and down completely randomly.
Pair Corralation between Visa and Spark Power
Taking into account the 90-day investment horizon Visa is expected to generate 150.74 times less return on investment than Spark Power. But when comparing it to its historical volatility, Visa Class A is 112.39 times less risky than Spark Power. It trades about 0.09 of its potential returns per unit of risk. Spark Power Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Spark Power Group on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Spark Power Group or generate 1250.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 31.52% |
| Values | Daily Returns |
Visa Class A vs. Spark Power Group
Performance |
| Timeline |
| Visa Class A |
| Spark Power Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Spark Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Spark Power
The main advantage of trading using opposite Visa and Spark Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Spark Power 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 Spark Power will offset losses from the drop in Spark Power's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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