Correlation Between Visa and Mirae Asset

Can any of the company-specific risk be diversified away by investing in both Visa and Mirae Asset 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 Mirae Asset 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 Mirae Asset No2, you can compare the effects of market volatilities on Visa and Mirae Asset 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 Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mirae Asset.

Diversification Opportunities for Visa and Mirae Asset

0.61

Correlation Coefficient

Visa  Mirae Asset

Poor diversification

The 3 months correlation between Visa and Mirae is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mirae Asset No2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset No2 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 Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset No2 has no effect on the direction of Visa i.e., Visa and Mirae Asset go up and down completely randomly.

Pair Corralation between Visa and Mirae Asset

Taking into account the 90-day investment horizon Visa is expected to generate 1.69 times less return on investment than Mirae Asset. But when comparing it to its historical volatility, Visa Class A is 1.8 times less risky than Mirae Asset. It trades about 0.13 of its potential returns per unit of risk. Mirae Asset No2 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,128,009  in Mirae Asset No2 on December 28, 2024 and sell it today you would earn a total of  158,991  from holding Mirae Asset No2 or generate 14.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.08%
Values	Daily Returns

Visa Class A  vs.  Mirae Asset No2

Visa Class A

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 10 (%) 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 April 2025.

Mirae Asset No2

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset No2 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirae Asset sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Mirae Asset

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

The idea behind Visa Class A and Mirae Asset No2 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.