Correlation Between Visa and Solusi Sinergi

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Can any of the company-specific risk be diversified away by investing in both Visa and Solusi Sinergi 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 Solusi Sinergi 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 Solusi Sinergi Digital, you can compare the effects of market volatilities on Visa and Solusi Sinergi 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 Solusi Sinergi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Solusi Sinergi.

Diversification Opportunities for Visa and Solusi Sinergi

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Visa and Solusi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Solusi Sinergi Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Sinergi Digital 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 Solusi Sinergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Sinergi Digital has no effect on the direction of Visa i.e., Visa and Solusi Sinergi go up and down completely randomly.

Pair Corralation between Visa and Solusi Sinergi

Taking into account the 90-day investment horizon Visa is expected to generate 3.38 times less return on investment than Solusi Sinergi. But when comparing it to its historical volatility, Visa Class A is 3.3 times less risky than Solusi Sinergi. It trades about 0.09 of its potential returns per unit of risk. Solusi Sinergi Digital is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  18,880  in Solusi Sinergi Digital on September 12, 2024 and sell it today you would earn a total of  22,920  from holding Solusi Sinergi Digital or generate 121.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy96.07%
ValuesDaily Returns

Visa Class A  vs.  Solusi Sinergi Digital

 Performance 
       Timeline  
Visa Class A 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Solusi Sinergi Digital 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Solusi Sinergi Digital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Solusi Sinergi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Visa and Solusi Sinergi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visa and Solusi Sinergi

The main advantage of trading using opposite Visa and Solusi Sinergi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Solusi Sinergi 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 Solusi Sinergi will offset losses from the drop in Solusi Sinergi's long position.
The idea behind Visa Class A and Solusi Sinergi Digital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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