Correlation Between Visa and Bank Utica

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

Diversification Opportunities for Visa and Bank Utica

0.78

Correlation Coefficient

Visa  Bank Utica

Poor diversification

The 3 months correlation between Visa and Bank is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bank Utica Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Utica Ny 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 Bank Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Utica Ny has no effect on the direction of Visa i.e., Visa and Bank Utica go up and down completely randomly.

Pair Corralation between Visa and Bank Utica

Taking into account the 90-day investment horizon Visa is expected to generate 2.31 times less return on investment than Bank Utica. But when comparing it to its historical volatility, Visa Class A is 1.61 times less risky than Bank Utica. It trades about 0.12 of its potential returns per unit of risk. Bank Utica Ny is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  41,500  in Bank Utica Ny on September 13, 2024 and sell it today you would earn a total of  9,500  from holding Bank Utica Ny or generate 22.89% 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.  Bank Utica Ny

Visa Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) 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 January 2025.

Bank Utica Ny

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Utica Ny are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Bank Utica disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Bank Utica

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

The idea behind Visa Class A and Bank Utica Ny 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.