Correlation Between Visa and CONSOLIDATED HALLMARK

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

Diversification Opportunities for Visa and CONSOLIDATED HALLMARK

0.85

Correlation Coefficient

Visa  CONSOLIDATED HALLMARK

Very poor diversification

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

Pair Corralation between Visa and CONSOLIDATED HALLMARK

Taking into account the 90-day investment horizon Visa is expected to generate 4.7 times less return on investment than CONSOLIDATED HALLMARK. But when comparing it to its historical volatility, Visa Class A is 3.69 times less risky than CONSOLIDATED HALLMARK. It trades about 0.15 of its potential returns per unit of risk. CONSOLIDATED HALLMARK INSURANCE is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  143.00  in CONSOLIDATED HALLMARK INSURANCE on September 5, 2024 and sell it today you would earn a total of  93.00  from holding CONSOLIDATED HALLMARK INSURANCE or generate 65.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Visa Class A  vs.  CONSOLIDATED HALLMARK INSURANC

Visa Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) 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.

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK INSURANCE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, CONSOLIDATED HALLMARK disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and CONSOLIDATED HALLMARK

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

The idea behind Visa Class A and CONSOLIDATED HALLMARK INSURANCE 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.