Correlation Between Visa and AMGEN
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By analyzing existing cross correlation between Visa Class A and AMGEN INC, you can compare the effects of market volatilities on Visa and AMGEN 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 AMGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and AMGEN.
Diversification Opportunities for Visa and AMGEN
Excellent diversification
The 3 months correlation between Visa and AMGEN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and AMGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGEN INC 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 AMGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMGEN INC has no effect on the direction of Visa i.e., Visa and AMGEN go up and down completely randomly.
Pair Corralation between Visa and AMGEN
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.41 times more return on investment than AMGEN. However, Visa is 1.41 times more volatile than AMGEN INC. It trades about 0.35 of its potential returns per unit of risk. AMGEN INC is currently generating about -0.2 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Visa Class A vs. AMGEN INC
Performance |
| Timeline |
| Visa Class A |
| AMGEN INC |
Visa and AMGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and AMGEN
The main advantage of trading using opposite Visa and AMGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, AMGEN 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 AMGEN will offset losses from the drop in AMGEN's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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