Correlation Between Visa and TIM Participacoes
Can any of the company-specific risk be diversified away by investing in both Visa and TIM Participacoes 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 TIM Participacoes 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 TIM Participacoes SA, you can compare the effects of market volatilities on Visa and TIM Participacoes 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 TIM Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and TIM Participacoes.
Diversification Opportunities for Visa and TIM Participacoes
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and TIM is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and TIM Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM Participacoes 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 TIM Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM Participacoes has no effect on the direction of Visa i.e., Visa and TIM Participacoes go up and down completely randomly.
Pair Corralation between Visa and TIM Participacoes
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.68 times more return on investment than TIM Participacoes. However, Visa Class A is 1.47 times less risky than TIM Participacoes. It trades about 0.28 of its potential returns per unit of risk. TIM Participacoes SA is currently generating about -0.28 per unit of risk. If you would invest 27,442 in Visa Class A on August 30, 2024 and sell it today you would earn a total of 4,028 from holding Visa Class A or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Visa Class A vs. TIM Participacoes SA
Performance |
| Timeline |
| Visa Class A |
| TIM Participacoes |
Visa and TIM Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and TIM Participacoes
The main advantage of trading using opposite Visa and TIM Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, TIM Participacoes 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 TIM Participacoes will offset losses from the drop in TIM Participacoes' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| TIM Participacoes vs. SK Telecom Co | TIM Participacoes vs. PLDT Inc ADR | TIM Participacoes vs. Liberty Broadband Srs | TIM Participacoes vs. Liberty Broadband Srs |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |