Correlation Between Visa and Wirecard
Can any of the company-specific risk be diversified away by investing in both Visa and Wirecard 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 Wirecard 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 Wirecard AG, you can compare the effects of market volatilities on Visa and Wirecard 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 Wirecard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Wirecard.
Diversification Opportunities for Visa and Wirecard
Very good diversification
The 3 months correlation between Visa and Wirecard is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Wirecard AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wirecard AG 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 Wirecard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wirecard AG has no effect on the direction of Visa i.e., Visa and Wirecard go up and down completely randomly.
Pair Corralation between Visa and Wirecard
Taking into account the 90-day investment horizon Visa is expected to generate 93.2 times less return on investment than Wirecard. But when comparing it to its historical volatility, Visa Class A is 87.74 times less risky than Wirecard. It trades about 0.1 of its potential returns per unit of risk. Wirecard AG is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Wirecard AG on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Wirecard AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Visa Class A vs. Wirecard AG
Performance |
| Timeline |
| Visa Class A |
| Wirecard AG |
Visa and Wirecard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Wirecard
The main advantage of trading using opposite Visa and Wirecard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Wirecard 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 Wirecard will offset losses from the drop in Wirecard's long position.The idea behind Visa Class A and Wirecard AG 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.| Wirecard vs. NextPlat Corp | Wirecard vs. Liquid Avatar Technologies | Wirecard vs. Waldencast Acquisition Corp | Wirecard vs. CXApp Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |