Correlation Between Visa and SVENSKA AEROGEL
Can any of the company-specific risk be diversified away by investing in both Visa and SVENSKA AEROGEL 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 SVENSKA AEROGEL 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 SVENSKA AEROGEL HOLDING, you can compare the effects of market volatilities on Visa and SVENSKA AEROGEL 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 SVENSKA AEROGEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and SVENSKA AEROGEL.
Diversification Opportunities for Visa and SVENSKA AEROGEL
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and SVENSKA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and SVENSKA AEROGEL HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA AEROGEL HOLDING 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 SVENSKA AEROGEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA AEROGEL HOLDING has no effect on the direction of Visa i.e., Visa and SVENSKA AEROGEL go up and down completely randomly.
Pair Corralation between Visa and SVENSKA AEROGEL
Taking into account the 90-day investment horizon Visa is expected to generate 637.81 times less return on investment than SVENSKA AEROGEL. But when comparing it to its historical volatility, Visa Class A is 268.53 times less risky than SVENSKA AEROGEL. It trades about 0.13 of its potential returns per unit of risk. SVENSKA AEROGEL HOLDING is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1.00 in SVENSKA AEROGEL HOLDING on September 22, 2024 and sell it today you would earn a total of 55.00 from holding SVENSKA AEROGEL HOLDING or generate 5500.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. SVENSKA AEROGEL HOLDING
Performance |
Timeline |
Visa Class A |
SVENSKA AEROGEL HOLDING |
Visa and SVENSKA AEROGEL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and SVENSKA AEROGEL
The main advantage of trading using opposite Visa and SVENSKA AEROGEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, SVENSKA AEROGEL 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 SVENSKA AEROGEL will offset losses from the drop in SVENSKA AEROGEL's long position.The idea behind Visa Class A and SVENSKA AEROGEL HOLDING 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.SVENSKA AEROGEL vs. The Hanover Insurance | SVENSKA AEROGEL vs. COMINTL BANK ADR1 | SVENSKA AEROGEL vs. TFS FINANCIAL | SVENSKA AEROGEL vs. Micron Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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