Correlation Between Visa and Bomesc Offshore

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

Diversification Opportunities for Visa and Bomesc Offshore

0.58

Correlation Coefficient

Visa  Bomesc Offshore

Very weak diversification

The 3 months correlation between Visa and Bomesc is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bomesc Offshore Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomesc Offshore Engi 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 Bomesc Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomesc Offshore Engi has no effect on the direction of Visa i.e., Visa and Bomesc Offshore go up and down completely randomly.

Pair Corralation between Visa and Bomesc Offshore

Taking into account the 90-day investment horizon Visa is expected to generate 1.96 times less return on investment than Bomesc Offshore. But when comparing it to its historical volatility, Visa Class A is 1.79 times less risky than Bomesc Offshore. It trades about 0.16 of its potential returns per unit of risk. Bomesc Offshore Engineering is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,167  in Bomesc Offshore Engineering on December 29, 2024 and sell it today you would earn a total of  248.00  from holding Bomesc Offshore Engineering or generate 21.25% return on investment over 90 days.

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

Visa Class A  vs.  Bomesc Offshore Engineering

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 12 (%) 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.

Bomesc Offshore Engi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bomesc Offshore Engineering are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bomesc Offshore sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Bomesc Offshore

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

The idea behind Visa Class A and Bomesc Offshore Engineering 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.