Correlation Between Visa and VerifyMe
Can any of the company-specific risk be diversified away by investing in both Visa and VerifyMe 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 VerifyMe 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 VerifyMe, you can compare the effects of market volatilities on Visa and VerifyMe 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 VerifyMe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and VerifyMe.
Diversification Opportunities for Visa and VerifyMe
Pay attention - limited upside
The 3 months correlation between Visa and VerifyMe is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and VerifyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VerifyMe 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 VerifyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VerifyMe has no effect on the direction of Visa i.e., Visa and VerifyMe go up and down completely randomly.
Pair Corralation between Visa and VerifyMe
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.2 times more return on investment than VerifyMe. However, Visa Class A is 4.88 times less risky than VerifyMe. It trades about 0.09 of its potential returns per unit of risk. VerifyMe is currently generating about 0.0 per unit of risk. If you would invest 20,460 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 10,859 from holding Visa Class A or generate 53.07% 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. VerifyMe
Performance |
| Timeline |
| Visa Class A |
| VerifyMe |
Visa and VerifyMe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and VerifyMe
The main advantage of trading using opposite Visa and VerifyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, VerifyMe 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 VerifyMe will offset losses from the drop in VerifyMe's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| VerifyMe vs. Plexus Corp | VerifyMe vs. Jabil Circuit | VerifyMe vs. Sanmina | VerifyMe vs. Methode Electronics |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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