Correlation Between NewtekOne, 850 and Visa

Can any of the company-specific risk be diversified away by investing in both NewtekOne, 850 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 NewtekOne, 850 and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NewtekOne, 850 percent and Visa Class A, you can compare the effects of market volatilities on NewtekOne, 850 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 NewtekOne, 850 with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewtekOne, 850 and Visa.

Diversification Opportunities for NewtekOne, 850 and Visa

0.63

Correlation Coefficient

NewtekOne, 850  Visa

Poor diversification

The 3 months correlation between NewtekOne, and Visa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NewtekOne, 850 percent 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 NewtekOne, 850 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 NewtekOne, 850 percent 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 NewtekOne, 850 i.e., NewtekOne, 850 and Visa go up and down completely randomly.

Pair Corralation between NewtekOne, 850 and Visa

Assuming the 90 days horizon NewtekOne, 850 is expected to generate 42.5 times less return on investment than Visa. But when comparing it to its historical volatility, NewtekOne, 850 percent is 3.41 times less risky than Visa. It trades about 0.01 of its potential returns per unit of risk. Visa Class A is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  28,992  in Visa Class A on September 14, 2024 and sell it today you would earn a total of  2,431  from holding Visa Class A or generate 8.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

NewtekOne, 850 percent  vs.  Visa Class A

NewtekOne, 850 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NewtekOne, 850 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NewtekOne, 850 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Visa Class A

Risk-Adjusted Performance

8 of 100

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 weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NewtekOne, 850 and Visa

The main advantage of trading using opposite NewtekOne, 850 and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewtekOne, 850 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 NewtekOne, 850 percent 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 Global Correlations module to find global opportunities by holding instruments from different markets.