Correlation Between Visa and NOVARTIS
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By analyzing existing cross correlation between Visa Class A and NOVARTIS CAP P, you can compare the effects of market volatilities on Visa and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NOVARTIS.
Diversification Opportunities for Visa and NOVARTIS
Very good diversification
The 3 months correlation between Visa and NOVARTIS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NOVARTIS CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAP P 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAP P has no effect on the direction of Visa i.e., Visa and NOVARTIS go up and down completely randomly.
Pair Corralation between Visa and NOVARTIS
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.97 times more return on investment than NOVARTIS. However, Visa Class A is 1.03 times less risky than NOVARTIS. It trades about 0.11 of its potential returns per unit of risk. NOVARTIS CAP P is currently generating about 0.02 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 44.44% |
| Values | Daily Returns |
Visa Class A vs. NOVARTIS CAP P
Performance |
| Timeline |
| Visa Class A |
| NOVARTIS CAP P |
Visa and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NOVARTIS
The main advantage of trading using opposite Visa and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| NOVARTIS vs. Pekin Life Insurance | NOVARTIS vs. Ameriprise Financial | NOVARTIS vs. United Fire Group | NOVARTIS vs. The Hanover Insurance |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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