Correlation Between Visa and Integral Acquisition

Can any of the company-specific risk be diversified away by investing in both Visa and Integral Acquisition 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 Integral Acquisition 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 Integral Acquisition 1, you can compare the effects of market volatilities on Visa and Integral Acquisition 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 Integral Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Integral Acquisition.

Diversification Opportunities for Visa and Integral Acquisition

-0.15

Correlation Coefficient

Visa  Integral Acquisition

Good diversification

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

Pair Corralation between Visa and Integral Acquisition

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.8 times more return on investment than Integral Acquisition. However, Visa Class A is 1.26 times less risky than Integral Acquisition. It trades about 0.16 of its potential returns per unit of risk. Integral Acquisition 1 is currently generating about -0.06 per unit of risk. If you would invest  26,058  in Visa Class A on October 25, 2024 and sell it today you would earn a total of  6,298  from holding Visa Class A or generate 24.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.6%
Values	Daily Returns

Visa Class A  vs.  Integral Acquisition 1

Visa Class A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) 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.

Integral Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Acquisition 1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Visa and Integral Acquisition

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

The idea behind Visa Class A and Integral Acquisition 1 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.