Correlation Between Visa and Starguide
Can any of the company-specific risk be diversified away by investing in both Visa and Starguide 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 Starguide 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 Starguide Group, you can compare the effects of market volatilities on Visa and Starguide 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 Starguide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Starguide.
Diversification Opportunities for Visa and Starguide
Good diversification
The 3 months correlation between Visa and Starguide is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Starguide Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starguide Group 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 Starguide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starguide Group has no effect on the direction of Visa i.e., Visa and Starguide go up and down completely randomly.
Pair Corralation between Visa and Starguide
Taking into account the 90-day investment horizon Visa is expected to generate 23.24 times less return on investment than Starguide. But when comparing it to its historical volatility, Visa Class A is 44.3 times less risky than Starguide. It trades about 0.35 of its potential returns per unit of risk. Starguide Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5.01 in Starguide Group on September 1, 2024 and sell it today you would earn a total of 4.99 from holding Starguide Group or generate 99.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Starguide Group
Performance |
| Timeline |
| Visa Class A |
| Starguide Group |
Visa and Starguide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Starguide
The main advantage of trading using opposite Visa and Starguide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Starguide 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 Starguide will offset losses from the drop in Starguide's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Starguide vs. A1 Group | Starguide vs. Roth CH Acquisition | Starguide vs. Awaysis Capital | Starguide vs. Carefree Group |
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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