Correlation Between Visa and STATE
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By analyzing existing cross correlation between Visa Class A and STATE STR P, you can compare the effects of market volatilities on Visa and STATE 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 STATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and STATE.
Diversification Opportunities for Visa and STATE
Good diversification
The 3 months correlation between Visa and STATE is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and STATE STR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STATE STR 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 STATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STATE STR P has no effect on the direction of Visa i.e., Visa and STATE go up and down completely randomly.
Pair Corralation between Visa and STATE
Taking into account the 90-day investment horizon Visa Class A is expected to generate 4.78 times more return on investment than STATE. However, Visa is 4.78 times more volatile than STATE STR P. It trades about 0.08 of its potential returns per unit of risk. STATE STR P is currently generating about 0.0 per unit of risk. If you would invest 21,128 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 10,380 from holding Visa Class A or generate 49.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Visa Class A vs. STATE STR P
Performance |
| Timeline |
| Visa Class A |
| STATE STR P |
Visa and STATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and STATE
The main advantage of trading using opposite Visa and STATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, STATE 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 STATE will offset losses from the drop in STATE'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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