Correlation Between Visa and Short Oil
Can any of the company-specific risk be diversified away by investing in both Visa and Short Oil 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 Short Oil 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 Short Oil Gas, you can compare the effects of market volatilities on Visa and Short Oil 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 Short Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Short Oil.
Diversification Opportunities for Visa and Short Oil
Significant diversification
The 3 months correlation between Visa and Short is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas 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 Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of Visa i.e., Visa and Short Oil go up and down completely randomly.
Pair Corralation between Visa and Short Oil
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.8 times more return on investment than Short Oil. However, Visa Class A is 1.25 times less risky than Short Oil. It trades about 0.08 of its potential returns per unit of risk. Short Oil Gas is currently generating about 0.0 per unit of risk. If you would invest 22,658 in Visa Class A on October 25, 2024 and sell it today you would earn a total of 10,163 from holding Visa Class A or generate 44.85% 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. Short Oil Gas
Performance |
| Timeline |
| Visa Class A |
| Short Oil Gas |
Visa and Short Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Short Oil
The main advantage of trading using opposite Visa and Short Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Short Oil 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 Short Oil will offset losses from the drop in Short Oil's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Short Oil vs. Fidelity Advisor Financial | Short Oil vs. Davis Financial Fund | Short Oil vs. Prudential Financial Services | Short Oil vs. T Rowe Price |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |