Correlation Between Visa and Studsvik
Can any of the company-specific risk be diversified away by investing in both Visa and Studsvik 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 Studsvik 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 Studsvik AB, you can compare the effects of market volatilities on Visa and Studsvik 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 Studsvik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Studsvik.
Diversification Opportunities for Visa and Studsvik
Excellent diversification
The 3 months correlation between Visa and Studsvik is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Studsvik AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Studsvik AB 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 Studsvik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Studsvik AB has no effect on the direction of Visa i.e., Visa and Studsvik go up and down completely randomly.
Pair Corralation between Visa and Studsvik
Taking into account the 90-day investment horizon Visa is expected to generate 1.84 times less return on investment than Studsvik. In addition to that, Visa is 1.34 times more volatile than Studsvik AB. It trades about 0.12 of its total potential returns per unit of risk. Studsvik AB is currently generating about 0.3 per unit of volatility. If you would invest 11,780 in Studsvik AB on October 24, 2024 and sell it today you would earn a total of 400.00 from holding Studsvik AB or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Visa Class A vs. Studsvik AB
Performance |
| Timeline |
| Visa Class A |
| Studsvik AB |
Visa and Studsvik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Studsvik
The main advantage of trading using opposite Visa and Studsvik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Studsvik 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 Studsvik will offset losses from the drop in Studsvik's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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