Correlation Between Visa and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Visa and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Visa and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Jefferies Financial.
Diversification Opportunities for Visa and Jefferies Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Visa and Jefferies is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Visa i.e., Visa and Jefferies Financial go up and down completely randomly.
Pair Corralation between Visa and Jefferies Financial
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.29 times more return on investment than Jefferies Financial. However, Visa Class A is 3.45 times less risky than Jefferies Financial. It trades about 0.05 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about -0.04 per unit of risk. If you would invest 31,722 in Visa Class A on October 23, 2024 and sell it today you would earn a total of 240.00 from holding Visa Class A or generate 0.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 94.44% |
Values | Daily Returns |
Visa Class A vs. Jefferies Financial Group
Performance |
Timeline |
Visa Class A |
Jefferies Financial |
Visa and Jefferies Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Jefferies Financial
The main advantage of trading using opposite Visa and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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