Correlation Between Visa and Kelly Strategic

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

Diversification Opportunities for Visa and Kelly Strategic

0.51

Correlation Coefficient

Visa  Kelly Strategic

Very weak diversification

The 3 months correlation between Visa and Kelly is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kelly Strategic Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Strategic 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 Kelly Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Strategic Mana has no effect on the direction of Visa i.e., Visa and Kelly Strategic go up and down completely randomly.

Pair Corralation between Visa and Kelly Strategic

If you would invest  26,930  in Visa Class A on October 3, 2024 and sell it today you would earn a total of  4,674  from holding Visa Class A or generate 17.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.8%
Values	Daily Returns

Visa Class A  vs.  Kelly Strategic Management

Visa Class A

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 15 (%) 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.

Kelly Strategic Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kelly Strategic Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kelly Strategic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Visa and Kelly Strategic

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

The idea behind Visa Class A and Kelly Strategic 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.