Correlation Between Visa and Fiten SA

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

Diversification Opportunities for Visa and Fiten SA

0.0

Correlation Coefficient

Visa  Fiten SA

Pay attention - limited upside

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

Pair Corralation between Visa and Fiten SA

If you would invest  31,722  in Visa Class A on October 24, 2024 and sell it today you would earn a total of  634.00  from holding Visa Class A or generate 2.0% 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.  Fiten SA

Visa Class A

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 16 (%) 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.

Fiten SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fiten SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Fiten SA is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Visa and Fiten SA

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

The idea behind Visa Class A and Fiten SA 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.