Correlation Between Visa and Cass Saddle

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

Diversification Opportunities for Visa and Cass Saddle

0.74

Correlation Coefficient

Visa  Cass Saddle

Poor diversification

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

Pair Corralation between Visa and Cass Saddle

Taking into account the 90-day investment horizon Visa is expected to generate 8.92 times less return on investment than Cass Saddle. But when comparing it to its historical volatility, Visa Class A is 6.63 times less risky than Cass Saddle. It trades about 0.07 of its potential returns per unit of risk. Cass Saddle Agriculture is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  47,700  in Cass Saddle Agriculture on October 12, 2024 and sell it today you would lose (47,200) from holding Cass Saddle Agriculture or give up 98.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.38%
Values	Daily Returns

Visa Class A  vs.  Cass Saddle Agriculture

Visa Class A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 13 (%) 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 February 2025.

Cass Saddle Agriculture

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cass Saddle Agriculture are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Cass Saddle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Cass Saddle

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

The idea behind Visa Class A and Cass Saddle Agriculture 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.