Correlation Between Visa and Cahayaputra Asa

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

Diversification Opportunities for Visa and Cahayaputra Asa

0.01

Correlation Coefficient

Visa  Cahayaputra Asa

Significant diversification

The 3 months correlation between Visa and Cahayaputra is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik 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 Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Visa i.e., Visa and Cahayaputra Asa go up and down completely randomly.

Pair Corralation between Visa and Cahayaputra Asa

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.36 times more return on investment than Cahayaputra Asa. However, Visa Class A is 2.75 times less risky than Cahayaputra Asa. It trades about 0.11 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about 0.03 per unit of risk. If you would invest  26,932  in Visa Class A on September 1, 2024 and sell it today you would earn a total of  4,576  from holding Visa Class A or generate 16.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Visa Class A  vs.  Cahayaputra Asa Keramik

Visa Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 12 (%) 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.

Cahayaputra Asa Keramik

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cahayaputra Asa Keramik are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Cahayaputra Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Visa and Cahayaputra Asa

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

The idea behind Visa Class A and Cahayaputra Asa Keramik 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.