Correlation Between Finance Of and Visa

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Finance Of and Visa 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 Finance Of and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finance of America and Visa Class A, you can compare the effects of market volatilities on Finance Of and Visa 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 Finance Of with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finance Of and Visa.

Diversification Opportunities for Finance Of and Visa

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Finance and Visa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Finance of America and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Finance Of 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 Finance of America are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Finance Of i.e., Finance Of and Visa go up and down completely randomly.

Pair Corralation between Finance Of and Visa

Considering the 90-day investment horizon Finance of America is expected to generate 8.04 times more return on investment than Visa. However, Finance Of is 8.04 times more volatile than Visa Class A. It trades about 0.25 of its potential returns per unit of risk. Visa Class A is currently generating about 0.2 per unit of risk. If you would invest  1,074  in Finance of America on September 21, 2024 and sell it today you would earn a total of  1,376  from holding Finance of America or generate 128.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Finance of America  vs.  Visa Class A

 Performance 
       Timeline  
Finance of America 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Finance of America are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Finance Of sustained solid returns over the last few months and may actually be approaching a breakup point.
Visa Class A 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Finance Of and Visa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Finance Of and Visa

The main advantage of trading using opposite Finance Of and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finance Of position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.
The idea behind Finance of America and Visa Class A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Global Correlations
Find global opportunities by holding instruments from different markets