Correlation Between Visa and Sumo Logic
Can any of the company-specific risk be diversified away by investing in both Visa and Sumo Logic 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 Sumo Logic 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 Sumo Logic, you can compare the effects of market volatilities on Visa and Sumo Logic 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 Sumo Logic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sumo Logic.
Diversification Opportunities for Visa and Sumo Logic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Sumo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sumo Logic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumo Logic 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 Sumo Logic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumo Logic has no effect on the direction of Visa i.e., Visa and Sumo Logic go up and down completely randomly.
Pair Corralation between Visa and Sumo Logic
Taking into account the 90-day investment horizon Visa is expected to generate 3.87 times less return on investment than Sumo Logic. But when comparing it to its historical volatility, Visa Class A is 3.41 times less risky than Sumo Logic. It trades about 0.09 of its potential returns per unit of risk. Sumo Logic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Sumo Logic on September 4, 2024 and sell it today you would earn a total of 313.00 from holding Sumo Logic or generate 35.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 21.21% |
| Values | Daily Returns |
Visa Class A vs. Sumo Logic
Performance |
| Timeline |
| Visa Class A |
| Sumo Logic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Sumo Logic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Sumo Logic
The main advantage of trading using opposite Visa and Sumo Logic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Sumo Logic 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 Sumo Logic will offset losses from the drop in Sumo Logic's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Sumo Logic vs. PagSeguro Digital | Sumo Logic vs. Endava | Sumo Logic vs. Nutanix | Sumo Logic vs. Palo Alto Networks |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |