Correlation Between Visa and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both Visa and Gelsenwasser 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 Gelsenwasser 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 Gelsenwasser AG, you can compare the effects of market volatilities on Visa and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Gelsenwasser.
Diversification Opportunities for Visa and Gelsenwasser
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Gelsenwasser is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of Visa i.e., Visa and Gelsenwasser go up and down completely randomly.
Pair Corralation between Visa and Gelsenwasser
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.34 times more return on investment than Gelsenwasser. However, Visa Class A is 2.91 times less risky than Gelsenwasser. It trades about 0.08 of its potential returns per unit of risk. Gelsenwasser AG is currently generating about -0.02 per unit of risk. If you would invest 21,038 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 9,954 from holding Visa Class A or generate 47.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.22% |
| Values | Daily Returns |
Visa Class A vs. Gelsenwasser AG
Performance |
| Timeline |
| Visa Class A |
| Gelsenwasser AG |
Visa and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Gelsenwasser
The main advantage of trading using opposite Visa and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Gelsenwasser vs. Spirent Communications plc | Gelsenwasser vs. SLR Investment Corp | Gelsenwasser vs. Singapore Telecommunications Limited | Gelsenwasser vs. INTERSHOP Communications Aktiengesellschaft |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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