Correlation Between Visa and Zhong Yang
Can any of the company-specific risk be diversified away by investing in both Visa and Zhong Yang 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 Zhong Yang 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 Zhong Yang Financial, you can compare the effects of market volatilities on Visa and Zhong Yang 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 Zhong Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Zhong Yang.
Diversification Opportunities for Visa and Zhong Yang
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Zhong is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Zhong Yang Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhong Yang Financial 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 Zhong Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhong Yang Financial has no effect on the direction of Visa i.e., Visa and Zhong Yang go up and down completely randomly.
Pair Corralation between Visa and Zhong Yang
Taking into account the 90-day investment horizon Visa is expected to generate 16.62 times less return on investment than Zhong Yang. But when comparing it to its historical volatility, Visa Class A is 4.45 times less risky than Zhong Yang. It trades about 0.05 of its potential returns per unit of risk. Zhong Yang Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Zhong Yang Financial on October 22, 2024 and sell it today you would earn a total of 17.00 from holding Zhong Yang Financial or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Zhong Yang Financial
Performance |
| Timeline |
| Visa Class A |
| Zhong Yang Financial |
Visa and Zhong Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Zhong Yang
The main advantage of trading using opposite Visa and Zhong Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Zhong Yang 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 Zhong Yang will offset losses from the drop in Zhong Yang's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Zhong Yang vs. Netcapital | Zhong Yang vs. Applied Digital | Zhong Yang vs. Magic Empire Global | Zhong Yang vs. Lazard |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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