Correlation Between Visa and Collective Mining

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

Diversification Opportunities for Visa and Collective Mining

0.0

Correlation Coefficient

Visa  Collective Mining

Pay attention - limited upside

The 3 months correlation between Visa and Collective is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining 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 Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Visa i.e., Visa and Collective Mining go up and down completely randomly.

Pair Corralation between Visa and Collective Mining

If you would invest  31,478  in Visa Class A on December 28, 2024 and sell it today you would earn a total of  2,807  from holding Visa Class A or generate 8.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Visa Class A  vs.  Collective Mining

Visa Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 10 (%) 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 April 2025.

Collective Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Collective Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Collective Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Visa and Collective Mining

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

The idea behind Visa Class A and Collective Mining 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.