Correlation Between Visa and STELMINE CANADA
Can any of the company-specific risk be diversified away by investing in both Visa and STELMINE CANADA 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 STELMINE CANADA 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 STELMINE CANADA LTD, you can compare the effects of market volatilities on Visa and STELMINE CANADA 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 STELMINE CANADA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and STELMINE CANADA.
Diversification Opportunities for Visa and STELMINE CANADA
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and STELMINE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and STELMINE CANADA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STELMINE CANADA LTD 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 STELMINE CANADA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STELMINE CANADA LTD has no effect on the direction of Visa i.e., Visa and STELMINE CANADA go up and down completely randomly.
Pair Corralation between Visa and STELMINE CANADA
Taking into account the 90-day investment horizon Visa is expected to generate 142.78 times less return on investment than STELMINE CANADA. But when comparing it to its historical volatility, Visa Class A is 100.82 times less risky than STELMINE CANADA. It trades about 0.09 of its potential returns per unit of risk. STELMINE CANADA LTD is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12.00 in STELMINE CANADA LTD on August 27, 2024 and sell it today you would lose (11.95) from holding STELMINE CANADA LTD or give up 99.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Visa Class A vs. STELMINE CANADA LTD
Performance |
| Timeline |
| Visa Class A |
| STELMINE CANADA LTD |
Visa and STELMINE CANADA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and STELMINE CANADA
The main advantage of trading using opposite Visa and STELMINE CANADA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, STELMINE CANADA 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 STELMINE CANADA will offset losses from the drop in STELMINE CANADA's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| STELMINE CANADA vs. Cogent Communications Holdings | STELMINE CANADA vs. Gamma Communications plc | STELMINE CANADA vs. Singapore Telecommunications Limited | STELMINE CANADA vs. KRISPY KREME DL 01 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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