Correlation Between Visa and NSTAR
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By analyzing existing cross correlation between Visa Class A and NSTAR ELEC 32, you can compare the effects of market volatilities on Visa and NSTAR 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 NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NSTAR.
Diversification Opportunities for Visa and NSTAR
Excellent diversification
The 3 months correlation between Visa and NSTAR is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NSTAR ELEC 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR ELEC 32 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 NSTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR ELEC 32 has no effect on the direction of Visa i.e., Visa and NSTAR go up and down completely randomly.
Pair Corralation between Visa and NSTAR
Taking into account the 90-day investment horizon Visa Class A is expected to generate 5.5 times more return on investment than NSTAR. However, Visa is 5.5 times more volatile than NSTAR ELEC 32. It trades about 0.35 of its potential returns per unit of risk. NSTAR ELEC 32 is currently generating about 0.06 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 | 76.19% |
| Values | Daily Returns |
Visa Class A vs. NSTAR ELEC 32
Performance |
| Timeline |
| Visa Class A |
| NSTAR ELEC 32 |
Visa and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NSTAR
The main advantage of trading using opposite Visa and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NSTAR 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 NSTAR will offset losses from the drop in NSTAR'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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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