Correlation Between Visa and MASCO
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By analyzing existing cross correlation between Visa Class A and MASCO P 775, you can compare the effects of market volatilities on Visa and MASCO 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 MASCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and MASCO.
Diversification Opportunities for Visa and MASCO
Excellent diversification
The 3 months correlation between Visa and MASCO is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and MASCO P 775 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASCO P 775 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 MASCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASCO P 775 has no effect on the direction of Visa i.e., Visa and MASCO go up and down completely randomly.
Pair Corralation between Visa and MASCO
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.39 times more return on investment than MASCO. However, Visa is 2.39 times more volatile than MASCO P 775. It trades about 0.16 of its potential returns per unit of risk. MASCO P 775 is currently generating about -0.01 per unit of risk. If you would invest 27,801 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 3,707 from holding Visa Class A or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.31% |
| Values | Daily Returns |
Visa Class A vs. MASCO P 775
Performance |
| Timeline |
| Visa Class A |
| MASCO P 775 |
Visa and MASCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and MASCO
The main advantage of trading using opposite Visa and MASCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, MASCO 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 MASCO will offset losses from the drop in MASCO'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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