Correlation Between Visa and Seven I
Can any of the company-specific risk be diversified away by investing in both Visa and Seven I 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 Seven I 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 Seven i Holdings, you can compare the effects of market volatilities on Visa and Seven I 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 Seven I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Seven I.
Diversification Opportunities for Visa and Seven I
Very weak diversification
The 3 months correlation between Visa and Seven is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Seven i Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven i Holdings 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 Seven I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven i Holdings has no effect on the direction of Visa i.e., Visa and Seven I go up and down completely randomly.
Pair Corralation between Visa and Seven I
Taking into account the 90-day investment horizon Visa is expected to generate 1.64 times less return on investment than Seven I. But when comparing it to its historical volatility, Visa Class A is 3.87 times less risky than Seven I. It trades about 0.33 of its potential returns per unit of risk. Seven i Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,440 in Seven i Holdings on September 3, 2024 and sell it today you would earn a total of 168.00 from holding Seven i Holdings or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Seven i Holdings
Performance |
| Timeline |
| Visa Class A |
| Seven i Holdings |
Visa and Seven I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Seven I
The main advantage of trading using opposite Visa and Seven I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Seven I 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 Seven I will offset losses from the drop in Seven I's long position.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
| Seven I vs. Kesko Oyj ADR | Seven I vs. Om Holdings International | Seven I vs. Tesco PLC | Seven I vs. Carrefour 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |