Correlation Between Visa and Yi Jinn

Can any of the company-specific risk be diversified away by investing in both Visa and Yi Jinn 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 Yi Jinn 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 Yi Jinn Industrial, you can compare the effects of market volatilities on Visa and Yi Jinn 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 Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Yi Jinn.

Diversification Opportunities for Visa and Yi Jinn

-0.16

Correlation Coefficient

Visa  Yi Jinn

Good diversification

The 3 months correlation between Visa and 1457 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial 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 Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Visa i.e., Visa and Yi Jinn go up and down completely randomly.

Pair Corralation between Visa and Yi Jinn

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.88 times more return on investment than Yi Jinn. However, Visa Class A is 1.14 times less risky than Yi Jinn. It trades about 0.09 of its potential returns per unit of risk. Yi Jinn Industrial is currently generating about 0.02 per unit of risk. If you would invest  20,311  in Visa Class A on September 17, 2024 and sell it today you would earn a total of  11,163  from holding Visa Class A or generate 54.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Visa Class A  vs.  Yi Jinn Industrial

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

Yi Jinn Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yi Jinn Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yi Jinn is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Visa and Yi Jinn

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

The idea behind Visa Class A and Yi Jinn Industrial 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.