Correlation Between Visa and Cresud SACIF

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

Diversification Opportunities for Visa and Cresud SACIF

-0.74

Correlation Coefficient

Visa  Cresud SACIF

Pay attention - limited upside

The 3 months correlation between Visa and Cresud is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Cresud SACIF y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SACIF y 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 Cresud SACIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SACIF y has no effect on the direction of Visa i.e., Visa and Cresud SACIF go up and down completely randomly.

Pair Corralation between Visa and Cresud SACIF

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.39 times more return on investment than Cresud SACIF. However, Visa Class A is 2.59 times less risky than Cresud SACIF. It trades about 0.11 of its potential returns per unit of risk. Cresud SACIF y is currently generating about -0.09 per unit of risk. If you would invest  31,435  in Visa Class A on December 19, 2024 and sell it today you would earn a total of  2,042  from holding Visa Class A or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Cresud SACIF y

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 8 (%) 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.

Cresud SACIF y

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cresud SACIF y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Visa and Cresud SACIF

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

The idea behind Visa Class A and Cresud SACIF y 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.