Correlation Between Visa and White Label
Can any of the company-specific risk be diversified away by investing in both Visa and White Label 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 White Label 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 White Label Liquid, you can compare the effects of market volatilities on Visa and White Label 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 White Label. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and White Label.
Diversification Opportunities for Visa and White Label
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and White is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and White Label Liquid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Label Liquid 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 White Label. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Label Liquid has no effect on the direction of Visa i.e., Visa and White Label go up and down completely randomly.
Pair Corralation between Visa and White Label
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.21 times more return on investment than White Label. However, Visa Class A is 4.87 times less risky than White Label. It trades about 0.09 of its potential returns per unit of risk. White Label Liquid is currently generating about -0.07 per unit of risk. If you would invest 20,785 in Visa Class A on September 26, 2024 and sell it today you would earn a total of 10,937 from holding Visa Class A or generate 52.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. White Label Liquid
Performance |
| Timeline |
| Visa Class A |
| White Label Liquid |
Visa and White Label Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and White Label
The main advantage of trading using opposite Visa and White Label positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, White Label 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 White Label will offset losses from the drop in White Label's long position.| Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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