Correlation Between Visa and Truong Thanh
Can any of the company-specific risk be diversified away by investing in both Visa and Truong Thanh 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 Truong Thanh 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 Truong Thanh Furniture, you can compare the effects of market volatilities on Visa and Truong Thanh 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 Truong Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Truong Thanh.
Diversification Opportunities for Visa and Truong Thanh
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and Truong is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Truong Thanh Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truong Thanh Furniture 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 Truong Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truong Thanh Furniture has no effect on the direction of Visa i.e., Visa and Truong Thanh go up and down completely randomly.
Pair Corralation between Visa and Truong Thanh
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.01 times more return on investment than Truong Thanh. However, Visa is 1.01 times more volatile than Truong Thanh Furniture. It trades about 0.53 of its potential returns per unit of risk. Truong Thanh Furniture is currently generating about -0.32 per unit of risk. If you would invest 31,304 in Visa Class A on November 6, 2024 and sell it today you would earn a total of 3,211 from holding Visa Class A or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Visa Class A vs. Truong Thanh Furniture
Performance |
| Timeline |
| Visa Class A |
| Truong Thanh Furniture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Truong Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Truong Thanh
The main advantage of trading using opposite Visa and Truong Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Truong Thanh 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 Truong Thanh will offset losses from the drop in Truong Thanh's long position.| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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