Correlation Between Visa and XFit Brands
Can any of the company-specific risk be diversified away by investing in both Visa and XFit Brands 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 XFit Brands 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 XFit Brands, you can compare the effects of market volatilities on Visa and XFit Brands 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 XFit Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and XFit Brands.
Diversification Opportunities for Visa and XFit Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and XFit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and XFit Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XFit Brands 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 XFit Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XFit Brands has no effect on the direction of Visa i.e., Visa and XFit Brands go up and down completely randomly.
Pair Corralation between Visa and XFit Brands
Taking into account the 90-day investment horizon Visa is expected to generate 11.99 times less return on investment than XFit Brands. But when comparing it to its historical volatility, Visa Class A is 26.23 times less risky than XFit Brands. It trades about 0.1 of its potential returns per unit of risk. XFit Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.06 in XFit Brands on September 1, 2024 and sell it today you would earn a total of 0.02 from holding XFit Brands or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Visa Class A vs. XFit Brands
Performance |
| Timeline |
| Visa Class A |
| XFit Brands |
Visa and XFit Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and XFit Brands
The main advantage of trading using opposite Visa and XFit Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, XFit Brands 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 XFit Brands will offset losses from the drop in XFit Brands' long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| XFit Brands vs. Sonos Inc | XFit Brands vs. Playtech plc | XFit Brands vs. Zhihu Inc ADR | XFit Brands vs. Planet Fitness |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |