Correlation Between Visa and PT Surya
Can any of the company-specific risk be diversified away by investing in both Visa and PT Surya 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 PT Surya 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 PT Surya Pertiwi, you can compare the effects of market volatilities on Visa and PT Surya 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 PT Surya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and PT Surya.
Diversification Opportunities for Visa and PT Surya
Very poor diversification
The 3 months correlation between Visa and SPTO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and PT Surya Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Surya Pertiwi 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 PT Surya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Surya Pertiwi has no effect on the direction of Visa i.e., Visa and PT Surya go up and down completely randomly.
Pair Corralation between Visa and PT Surya
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.76 times more return on investment than PT Surya. However, Visa Class A is 1.31 times less risky than PT Surya. It trades about 0.37 of its potential returns per unit of risk. PT Surya Pertiwi is currently generating about 0.27 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. PT Surya Pertiwi
Performance |
| Timeline |
| Visa Class A |
| PT Surya Pertiwi |
Visa and PT Surya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and PT Surya
The main advantage of trading using opposite Visa and PT Surya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, PT Surya 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 PT Surya will offset losses from the drop in PT Surya'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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