Correlation Between Visa and Tele2 AB
Can any of the company-specific risk be diversified away by investing in both Visa and Tele2 AB 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 Tele2 AB 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 Tele2 AB, you can compare the effects of market volatilities on Visa and Tele2 AB 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 Tele2 AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Tele2 AB.
Diversification Opportunities for Visa and Tele2 AB
Good diversification
The 3 months correlation between Visa and Tele2 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Tele2 AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tele2 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 Tele2 AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tele2 AB has no effect on the direction of Visa i.e., Visa and Tele2 AB go up and down completely randomly.
Pair Corralation between Visa and Tele2 AB
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.75 times more return on investment than Tele2 AB. However, Visa Class A is 1.34 times less risky than Tele2 AB. It trades about 0.11 of its potential returns per unit of risk. Tele2 AB is currently generating about 0.07 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Visa Class A vs. Tele2 AB
Performance |
| Timeline |
| Visa Class A |
| Tele2 AB |
Visa and Tele2 AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Tele2 AB
The main advantage of trading using opposite Visa and Tele2 AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Tele2 AB 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 Tele2 AB will offset losses from the drop in Tele2 AB's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Tele2 AB vs. Checkin Group AB | Tele2 AB vs. Midsummer AB | Tele2 AB vs. Hexatronic Group AB | Tele2 AB vs. Cint Group AB |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |