Correlation Between Visa and Haoxiangni Jujube

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

By analyzing existing cross correlation between Visa Class A and Haoxiangni Jujube Co, you can compare the effects of market volatilities on Visa and Haoxiangni Jujube 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 Haoxiangni Jujube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Haoxiangni Jujube.

Diversification Opportunities for Visa and Haoxiangni Jujube

0.83

Correlation Coefficient

Visa  Haoxiangni Jujube

Very poor diversification

The 3 months correlation between Visa and Haoxiangni is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Haoxiangni Jujube Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haoxiangni Jujube 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 Haoxiangni Jujube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haoxiangni Jujube has no effect on the direction of Visa i.e., Visa and Haoxiangni Jujube go up and down completely randomly.

Pair Corralation between Visa and Haoxiangni Jujube

Taking into account the 90-day investment horizon Visa is expected to generate 8.86 times less return on investment than Haoxiangni Jujube. But when comparing it to its historical volatility, Visa Class A is 5.76 times less risky than Haoxiangni Jujube. It trades about 0.09 of its potential returns per unit of risk. Haoxiangni Jujube Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  785.00  in Haoxiangni Jujube Co on October 8, 2024 and sell it today you would earn a total of  101.00  from holding Haoxiangni Jujube Co or generate 12.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.0%
Values	Daily Returns

Visa Class A  vs.  Haoxiangni Jujube Co

Visa Class A

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Haoxiangni Jujube

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haoxiangni Jujube Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Haoxiangni Jujube sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Haoxiangni Jujube

The main advantage of trading using opposite Visa and Haoxiangni Jujube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Haoxiangni Jujube 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 Haoxiangni Jujube will offset losses from the drop in Haoxiangni Jujube's long position.

The idea behind Visa Class A and Haoxiangni Jujube Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.