Correlation Between Visa and IQ Global
Can any of the company-specific risk be diversified away by investing in both Visa and IQ Global 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 IQ Global 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 IQ Global Equity, you can compare the effects of market volatilities on Visa and IQ Global 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 IQ Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and IQ Global.
Diversification Opportunities for Visa and IQ Global
Very weak diversification
The 3 months correlation between Visa and WRND is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and IQ Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Global Equity 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 IQ Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Global Equity has no effect on the direction of Visa i.e., Visa and IQ Global go up and down completely randomly.
Pair Corralation between Visa and IQ Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.24 times more return on investment than IQ Global. However, Visa is 1.24 times more volatile than IQ Global Equity. It trades about 0.08 of its potential returns per unit of risk. IQ Global Equity is currently generating about 0.07 per unit of risk. If you would invest 27,727 in Visa Class A on November 3, 2024 and sell it today you would earn a total of 6,453 from holding Visa Class A or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. IQ Global Equity
Performance |
| Timeline |
| Visa Class A |
| IQ Global Equity |
Visa and IQ Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and IQ Global
The main advantage of trading using opposite Visa and IQ Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, IQ Global 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 IQ Global will offset losses from the drop in IQ Global's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| IQ Global vs. Vanguard Total World | IQ Global vs. iShares MSCI ACWI | IQ Global vs. iShares MSCI Global | IQ Global vs. iShares Global 100 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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