Correlation Between Visa and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Visa and CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar SA, you can compare the effects of market volatilities on Visa and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CM Hospitalar.
Diversification Opportunities for Visa and CM Hospitalar
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and VVEO3 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Visa i.e., Visa and CM Hospitalar go up and down completely randomly.
Pair Corralation between Visa and CM Hospitalar
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.3 times more return on investment than CM Hospitalar. However, Visa Class A is 3.31 times less risky than CM Hospitalar. It trades about 0.5 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.42 per unit of risk. If you would invest 31,304 in Visa Class A on November 5, 2024 and sell it today you would earn a total of 2,876 from holding Visa Class A or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Visa Class A vs. CM Hospitalar SA
Performance |
| Timeline |
| Visa Class A |
| CM Hospitalar SA |
Visa and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CM Hospitalar
The main advantage of trading using opposite Visa and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| CM Hospitalar vs. Fidelity National Information | CM Hospitalar vs. Medical Properties Trust, | CM Hospitalar vs. Extra Space Storage | CM Hospitalar vs. Fresenius Medical Care |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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