Correlation Between Visa and Grand Investment

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

Diversification Opportunities for Visa and Grand Investment

0.15

Correlation Coefficient

Visa  Grand Investment

Average diversification

The 3 months correlation between Visa and Grand is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Grand Investment Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Investment Capital 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 Grand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Investment Capital has no effect on the direction of Visa i.e., Visa and Grand Investment go up and down completely randomly.

Pair Corralation between Visa and Grand Investment

Taking into account the 90-day investment horizon Visa is expected to generate 2.34 times less return on investment than Grand Investment. But when comparing it to its historical volatility, Visa Class A is 2.15 times less risky than Grand Investment. It trades about 0.17 of its potential returns per unit of risk. Grand Investment Capital is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  902.00  in Grand Investment Capital on October 20, 2024 and sell it today you would earn a total of  206.00  from holding Grand Investment Capital or generate 22.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.26%
Values	Daily Returns

Visa Class A  vs.  Grand Investment Capital

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.

Grand Investment Capital

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Investment Capital are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Grand Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Grand Investment

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

The idea behind Visa Class A and Grand Investment Capital 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.