Correlation Between Visa and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Visa and Straumann Holding 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 Straumann Holding 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 Straumann Holding AG, you can compare the effects of market volatilities on Visa and Straumann Holding 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 Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Straumann Holding.
Diversification Opportunities for Visa and Straumann Holding
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Straumann is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding 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 Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Visa i.e., Visa and Straumann Holding go up and down completely randomly.
Pair Corralation between Visa and Straumann Holding
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.49 times more return on investment than Straumann Holding. However, Visa Class A is 2.04 times less risky than Straumann Holding. It trades about 0.08 of its potential returns per unit of risk. Straumann Holding AG is currently generating about 0.01 per unit of risk. If you would invest 21,038 in Visa Class A on August 25, 2024 and sell it today you would earn a total of 9,954 from holding Visa Class A or generate 47.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Visa Class A vs. Straumann Holding AG
Performance |
| Timeline |
| Visa Class A |
| Straumann Holding |
Visa and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Straumann Holding
The main advantage of trading using opposite Visa and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Straumann Holding vs. Sonova H Ag | Straumann Holding vs. Sika AG | Straumann Holding vs. Lonza Group AG | Straumann Holding vs. Givaudan SA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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