Correlation Between Visa and Kopernik Global

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

Diversification Opportunities for Visa and Kopernik Global

-0.8

Correlation Coefficient

Visa  Kopernik Global

Pay attention - limited upside

The 3 months correlation between Visa and Kopernik is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kopernik Global All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik Global All 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 Kopernik Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik Global All has no effect on the direction of Visa i.e., Visa and Kopernik Global go up and down completely randomly.

Pair Corralation between Visa and Kopernik Global

Taking into account the 90-day investment horizon Visa is expected to generate 2.57 times less return on investment than Kopernik Global. In addition to that, Visa is 2.16 times more volatile than Kopernik Global All Cap. It trades about 0.05 of its total potential returns per unit of risk. Kopernik Global All Cap is currently generating about 0.28 per unit of volatility. If you would invest  1,103  in Kopernik Global All Cap on October 22, 2024 and sell it today you would earn a total of  22.00  from holding Kopernik Global All Cap or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Visa Class A  vs.  Kopernik Global All Cap

Visa Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 14 (%) 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.

Kopernik Global All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopernik Global All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Visa and Kopernik Global

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

The idea behind Visa Class A and Kopernik Global All Cap 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.