Correlation Between Visa and Goodbye Kansas

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

Diversification Opportunities for Visa and Goodbye Kansas

0.01

Correlation Coefficient

Visa  Goodbye Kansas

Significant diversification

The 3 months correlation between Visa and Goodbye is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Goodbye Kansas Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodbye Kansas Group 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 Goodbye Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodbye Kansas Group has no effect on the direction of Visa i.e., Visa and Goodbye Kansas go up and down completely randomly.

Pair Corralation between Visa and Goodbye Kansas

Taking into account the 90-day investment horizon Visa is expected to generate 8.22 times less return on investment than Goodbye Kansas. But when comparing it to its historical volatility, Visa Class A is 4.25 times less risky than Goodbye Kansas. It trades about 0.09 of its potential returns per unit of risk. Goodbye Kansas Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Goodbye Kansas Group on October 22, 2024 and sell it today you would earn a total of  34.00  from holding Goodbye Kansas Group or generate 24.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.5%
Values	Daily Returns

Visa Class A  vs.  Goodbye Kansas Group

Visa Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 14 (%) 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.

Goodbye Kansas Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goodbye Kansas Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Goodbye Kansas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Goodbye Kansas

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

The idea behind Visa Class A and Goodbye Kansas Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..