Correlation Between ORIX and Visa
Can any of the company-specific risk be diversified away by investing in both ORIX 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 ORIX and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and Visa Inc, you can compare the effects of market volatilities on ORIX 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 ORIX with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and Visa.
Diversification Opportunities for ORIX and Visa
Excellent diversification
The 3 months correlation between ORIX and Visa is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and ORIX 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 ORIX Corporation 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 Inc has no effect on the direction of ORIX i.e., ORIX and Visa go up and down completely randomly.
Pair Corralation between ORIX and Visa
Assuming the 90 days horizon ORIX Corporation is expected to under-perform the Visa. In addition to that, ORIX is 1.75 times more volatile than Visa Inc. It trades about -0.09 of its total potential returns per unit of risk. Visa Inc is currently generating about 0.27 per unit of volatility. If you would invest 30,020 in Visa Inc on December 1, 2024 and sell it today you would earn a total of 4,850 from holding Visa Inc or generate 16.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ORIX Corp. vs. Visa Inc
Performance |
Timeline |
ORIX |
Visa Inc |
ORIX and Visa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ORIX and Visa
The main advantage of trading using opposite ORIX and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX 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.ORIX vs. Flutter Entertainment PLC | ORIX vs. Fuji Media Holdings | ORIX vs. ProSiebenSat1 Media SE | ORIX vs. Tencent Music Entertainment |
Visa vs. Q2M Managementberatung AG | Visa vs. Platinum Investment Management | Visa vs. Coor Service Management | Visa vs. Corporate Travel Management |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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