Correlation Between Visa and Vigo System
Can any of the company-specific risk be diversified away by investing in both Visa and Vigo System at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Vigo System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Vigo System SA, you can compare the effects of market volatilities on Visa and Vigo System 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 Vigo System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Vigo System.
Diversification Opportunities for Visa and Vigo System
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Vigo is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Vigo System SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vigo System SA 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 Vigo System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vigo System SA has no effect on the direction of Visa i.e., Visa and Vigo System go up and down completely randomly.
Pair Corralation between Visa and Vigo System
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.53 times more return on investment than Vigo System. However, Visa Class A is 1.89 times less risky than Vigo System. It trades about 0.35 of its potential returns per unit of risk. Vigo System SA is currently generating about -0.21 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Vigo System SA
Performance |
| Timeline |
| Visa Class A |
| Vigo System SA |
Visa and Vigo System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Vigo System
The main advantage of trading using opposite Visa and Vigo System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Vigo System 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 Vigo System will offset losses from the drop in Vigo System's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Vigo System vs. Banco Santander SA | Vigo System vs. UniCredit SpA | Vigo System vs. CEZ as | Vigo System vs. Polski Koncern Naftowy |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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