Correlation Between Visa and Bridgemarq Real

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

Diversification Opportunities for Visa and Bridgemarq Real

-0.85

Correlation Coefficient

Visa  Bridgemarq Real

Pay attention - limited upside

The 3 months correlation between Visa and Bridgemarq is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bridgemarq Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgemarq Real Estate 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 Bridgemarq Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgemarq Real Estate has no effect on the direction of Visa i.e., Visa and Bridgemarq Real go up and down completely randomly.

Pair Corralation between Visa and Bridgemarq Real

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.82 times more return on investment than Bridgemarq Real. However, Visa Class A is 1.22 times less risky than Bridgemarq Real. It trades about 0.25 of its potential returns per unit of risk. Bridgemarq Real Estate is currently generating about -0.11 per unit of risk. If you would invest  31,612  in Visa Class A on December 2, 2024 and sell it today you would earn a total of  4,659  from holding Visa Class A or generate 14.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Visa Class A  vs.  Bridgemarq Real Estate

Visa Class A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 19 (%) 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.

Bridgemarq Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bridgemarq Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Visa and Bridgemarq Real

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

The idea behind Visa Class A and Bridgemarq Real Estate 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 Anywhere module to track or share privately all of your investments from the convenience of any device.