Correlation Between Visa and Thule Group
Can any of the company-specific risk be diversified away by investing in both Visa and Thule Group 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 Thule Group 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 Thule Group AB, you can compare the effects of market volatilities on Visa and Thule Group 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 Thule Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Thule Group.
Diversification Opportunities for Visa and Thule Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Thule is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule Group 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 Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of Visa i.e., Visa and Thule Group go up and down completely randomly.
Pair Corralation between Visa and Thule Group
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.55 times more return on investment than Thule Group. However, Visa Class A is 1.83 times less risky than Thule Group. It trades about 0.33 of its potential returns per unit of risk. Thule Group AB is currently generating about -0.07 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Thule Group AB
Performance |
| Timeline |
| Visa Class A |
| Thule Group AB |
Visa and Thule Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Thule Group
The main advantage of trading using opposite Visa and Thule Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Thule Group 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 Thule Group will offset losses from the drop in Thule Group's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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