Correlation Between Goldenstone Acquisition and Visa

Can any of the company-specific risk be diversified away by investing in both Goldenstone Acquisition 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 Goldenstone Acquisition and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldenstone Acquisition Limited and Visa Class A, you can compare the effects of market volatilities on Goldenstone Acquisition 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 Goldenstone Acquisition with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldenstone Acquisition and Visa.

Diversification Opportunities for Goldenstone Acquisition and Visa

-0.51

Correlation Coefficient

Goldenstone Acquisition  Visa

Excellent diversification

The 3 months correlation between Goldenstone and Visa is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Goldenstone Acquisition Limite 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 Goldenstone Acquisition 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 Goldenstone Acquisition Limited 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 Goldenstone Acquisition i.e., Goldenstone Acquisition and Visa go up and down completely randomly.

Pair Corralation between Goldenstone Acquisition and Visa

Assuming the 90 days horizon Goldenstone Acquisition Limited is expected to generate 6.2 times more return on investment than Visa. However, Goldenstone Acquisition is 6.2 times more volatile than Visa Class A. It trades about 0.24 of its potential returns per unit of risk. Visa Class A is currently generating about 0.28 per unit of risk. If you would invest  20.00  in Goldenstone Acquisition Limited on November 28, 2024 and sell it today you would earn a total of  4.00  from holding Goldenstone Acquisition Limited or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.27%
Values	Daily Returns

Goldenstone Acquisition Limite  vs.  Visa Class A

Goldenstone Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldenstone Acquisition Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Goldenstone Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Visa Class A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Goldenstone Acquisition and Visa

The main advantage of trading using opposite Goldenstone Acquisition and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldenstone Acquisition 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 Goldenstone Acquisition Limited 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.