Correlation Between Visa and AILEW New

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

Diversification Opportunities for Visa and AILEW New

0.0

Correlation Coefficient

Visa  AILEW New

Pay attention - limited upside

The 3 months correlation between Visa and AILEW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and AILEW New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AILEW New 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 AILEW New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AILEW New has no effect on the direction of Visa i.e., Visa and AILEW New go up and down completely randomly.

Pair Corralation between Visa and AILEW New

If you would invest  31,478  in Visa Class A on December 28, 2024 and sell it today you would earn a total of  3,508  from holding Visa Class A or generate 11.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Visa Class A  vs.  AILEW New

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 13 (%) 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.

AILEW New

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Visa and AILEW New

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

The idea behind Visa Class A and AILEW New 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 Global Correlations module to find global opportunities by holding instruments from different markets.