Correlation Between Visa and Xp
Can any of the company-specific risk be diversified away by investing in both Visa and Xp 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 Xp 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 Xp Inc, you can compare the effects of market volatilities on Visa and Xp 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 Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Xp.
Diversification Opportunities for Visa and Xp
Excellent diversification
The 3 months correlation between Visa and Xp is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Visa i.e., Visa and Xp go up and down completely randomly.
Pair Corralation between Visa and Xp
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.54 times more return on investment than Xp. However, Visa Class A is 1.85 times less risky than Xp. It trades about 0.33 of its potential returns per unit of risk. Xp Inc is currently generating about -0.22 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Xp Inc
Performance |
| Timeline |
| Visa Class A |
| Xp Inc |
Visa and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Xp
The main advantage of trading using opposite Visa and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Xp vs. Raymond James Financial | Xp vs. Evercore Partners | Xp vs. Selective Insurance Group | Xp vs. Reinsurance Group of |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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