Correlation Between Visa and Binah Capital

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

Diversification Opportunities for Visa and Binah Capital

0.09

Correlation Coefficient

Visa  Binah Capital

Significant diversification

The 3 months correlation between Visa and Binah is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, 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 Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of Visa i.e., Visa and Binah Capital go up and down completely randomly.

Pair Corralation between Visa and Binah Capital

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.08 times more return on investment than Binah Capital. However, Visa Class A is 12.1 times less risky than Binah Capital. It trades about 0.09 of its potential returns per unit of risk. Binah Capital Group, is currently generating about 0.0 per unit of risk. If you would invest  21,738  in Visa Class A on September 17, 2024 and sell it today you would earn a total of  9,736  from holding Visa Class A or generate 44.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.35%
Values	Daily Returns

Visa Class A  vs.  Binah Capital Group,

Visa Class A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Binah Capital Group,

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Binah Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Binah Capital

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

The idea behind Visa Class A and Binah Capital Group, 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.