Correlation Between Visa and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both Visa and Selina Hospitality 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 Selina Hospitality 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 Selina Hospitality PLC, you can compare the effects of market volatilities on Visa and Selina Hospitality 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 Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Selina Hospitality.
Diversification Opportunities for Visa and Selina Hospitality
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and Selina is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC 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 Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of Visa i.e., Visa and Selina Hospitality go up and down completely randomly.
Pair Corralation between Visa and Selina Hospitality
Taking into account the 90-day investment horizon Visa is expected to generate 71.7 times less return on investment than Selina Hospitality. But when comparing it to its historical volatility, Visa Class A is 54.86 times less risky than Selina Hospitality. It trades about 0.1 of its potential returns per unit of risk. Selina Hospitality PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.27 in Selina Hospitality PLC on September 3, 2024 and sell it today you would lose (0.27) from holding Selina Hospitality PLC or give up 21.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.8% |
| Values | Daily Returns |
Visa Class A vs. Selina Hospitality PLC
Performance |
| Timeline |
| Visa Class A |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Selina Hospitality
The main advantage of trading using opposite Visa and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Selina Hospitality vs. NetSol Technologies | Selina Hospitality vs. Procter Gamble | Selina Hospitality vs. Steven Madden | Selina Hospitality vs. RBC Bearings Incorporated |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |