Correlation Between Visa and Globlex Holding

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

Diversification Opportunities for Visa and Globlex Holding

-0.91
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Visa and Globlex is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana 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 Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of Visa i.e., Visa and Globlex Holding go up and down completely randomly.

Pair Corralation between Visa and Globlex Holding

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.48 times more return on investment than Globlex Holding. However, Visa Class A is 2.09 times less risky than Globlex Holding. It trades about 0.13 of its potential returns per unit of risk. Globlex Holding Management is currently generating about -0.03 per unit of risk. If you would invest  30,992  in Visa Class A on September 23, 2024 and sell it today you would earn a total of  779.00  from holding Visa Class A or generate 2.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Visa Class A  vs.  Globlex Holding Management

 Performance 
       Timeline  
Visa Class A 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Globlex Holding Mana 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Globlex Holding Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Visa and Globlex Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visa and Globlex Holding

The main advantage of trading using opposite Visa and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Globlex Holding 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 Globlex Holding will offset losses from the drop in Globlex Holding's long position.
The idea behind Visa Class A and Globlex Holding Management 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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