Correlation Between Visa and BOE Technology
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By analyzing existing cross correlation between Visa Class A and BOE Technology Group, you can compare the effects of market volatilities on Visa and BOE Technology 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 BOE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and BOE Technology.
Diversification Opportunities for Visa and BOE Technology
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and BOE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology Group 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 BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of Visa i.e., Visa and BOE Technology go up and down completely randomly.
Pair Corralation between Visa and BOE Technology
Taking into account the 90-day investment horizon Visa is expected to generate 3.32 times less return on investment than BOE Technology. But when comparing it to its historical volatility, Visa Class A is 1.06 times less risky than BOE Technology. It trades about 0.07 of its potential returns per unit of risk. BOE Technology Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 420.00 in BOE Technology Group on September 26, 2024 and sell it today you would earn a total of 20.00 from holding BOE Technology Group or generate 4.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Visa Class A vs. BOE Technology Group
Performance |
Timeline |
Visa Class A |
BOE Technology Group |
Visa and BOE Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and BOE Technology
The main advantage of trading using opposite Visa and BOE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, BOE Technology 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 BOE Technology will offset losses from the drop in BOE Technology's long position.Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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