Correlation Between Visa and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Visa and Waterstone Financial 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 Waterstone Financial 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 Waterstone Financial, you can compare the effects of market volatilities on Visa and Waterstone Financial 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Waterstone Financial.
Diversification Opportunities for Visa and Waterstone Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Waterstone is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Visa i.e., Visa and Waterstone Financial go up and down completely randomly.
Pair Corralation between Visa and Waterstone Financial
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.47 times more return on investment than Waterstone Financial. However, Visa Class A is 2.12 times less risky than Waterstone Financial. It trades about 0.32 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.04 per unit of risk. If you would invest 28,322 in Visa Class A on August 24, 2024 and sell it today you would earn a total of 2,668 from holding Visa Class A or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Waterstone Financial
Performance |
| Timeline |
| Visa Class A |
| Waterstone Financial |
Visa and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Waterstone Financial
The main advantage of trading using opposite Visa and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Waterstone Financial 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 Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |