Correlation Between Visa and World Kinect
Can any of the company-specific risk be diversified away by investing in both Visa and World Kinect 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 World Kinect 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 World Kinect, you can compare the effects of market volatilities on Visa and World Kinect 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 World Kinect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and World Kinect.
Diversification Opportunities for Visa and World Kinect
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and World is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and World Kinect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Kinect 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 World Kinect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Kinect has no effect on the direction of Visa i.e., Visa and World Kinect go up and down completely randomly.
Pair Corralation between Visa and World Kinect
Taking into account the 90-day investment horizon Visa is expected to generate 2.1 times less return on investment than World Kinect. But when comparing it to its historical volatility, Visa Class A is 1.72 times less risky than World Kinect. It trades about 0.09 of its potential returns per unit of risk. World Kinect is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,722 in World Kinect on October 20, 2024 and sell it today you would earn a total of 85.00 from holding World Kinect or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. World Kinect
Performance |
| Timeline |
| Visa Class A |
| World Kinect |
Visa and World Kinect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and World Kinect
The main advantage of trading using opposite Visa and World Kinect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, World Kinect 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 World Kinect will offset losses from the drop in World Kinect's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| World Kinect vs. Nok Airlines Public | World Kinect vs. International Consolidated Airlines | World Kinect vs. Toronto Dominion Bank | World Kinect vs. flyExclusive, |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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