Correlation Between Visa and NEXTERA
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By analyzing existing cross correlation between Visa Class A and NEXTERA ENERGY CAPITAL, you can compare the effects of market volatilities on Visa and NEXTERA 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 NEXTERA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NEXTERA.
Diversification Opportunities for Visa and NEXTERA
Excellent diversification
The 3 months correlation between Visa and NEXTERA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NEXTERA ENERGY CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTERA ENERGY CAPITAL 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 NEXTERA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTERA ENERGY CAPITAL has no effect on the direction of Visa i.e., Visa and NEXTERA go up and down completely randomly.
Pair Corralation between Visa and NEXTERA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.9 times more return on investment than NEXTERA. However, Visa is 1.9 times more volatile than NEXTERA ENERGY CAPITAL. It trades about 0.33 of its potential returns per unit of risk. NEXTERA ENERGY CAPITAL is currently generating about -0.34 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,627 from holding Visa Class A or generate 9.26% 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. NEXTERA ENERGY CAPITAL
Performance |
| Timeline |
| Visa Class A |
| NEXTERA ENERGY CAPITAL |
Visa and NEXTERA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NEXTERA
The main advantage of trading using opposite Visa and NEXTERA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NEXTERA 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 NEXTERA will offset losses from the drop in NEXTERA's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| NEXTERA vs. AEP TEX INC | NEXTERA vs. US BANK NATIONAL | NEXTERA vs. Dupont De Nemours | NEXTERA vs. The Travelers Companies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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