Correlation Between Visa and Airsculpt Technologies

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

Diversification Opportunities for Visa and Airsculpt Technologies

0.67

Correlation Coefficient

Visa  Airsculpt Technologies

Poor diversification

The 3 months correlation between Visa and Airsculpt is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies 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 Airsculpt Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airsculpt Technologies has no effect on the direction of Visa i.e., Visa and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Visa and Airsculpt Technologies

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.21 times more return on investment than Airsculpt Technologies. However, Visa Class A is 4.81 times less risky than Airsculpt Technologies. It trades about 0.11 of its potential returns per unit of risk. Airsculpt Technologies is currently generating about 0.02 per unit of risk. If you would invest  23,082  in Visa Class A on September 24, 2024 and sell it today you would earn a total of  8,689  from holding Visa Class A or generate 37.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Airsculpt Technologies

Visa Class A

Risk-Adjusted Performance

17 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Airsculpt Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Airsculpt Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Airsculpt Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Visa and Airsculpt Technologies

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

The idea behind Visa Class A and Airsculpt Technologies 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.