Correlation Between Visa and Lighthouse Hotel
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By analyzing existing cross correlation between Visa Class A and Lighthouse Hotel PLC, you can compare the effects of market volatilities on Visa and Lighthouse Hotel 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 Lighthouse Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Lighthouse Hotel.
Diversification Opportunities for Visa and Lighthouse Hotel
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Lighthouse is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Lighthouse Hotel PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lighthouse Hotel PLC 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 Lighthouse Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lighthouse Hotel PLC has no effect on the direction of Visa i.e., Visa and Lighthouse Hotel go up and down completely randomly.
Pair Corralation between Visa and Lighthouse Hotel
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.42 times more return on investment than Lighthouse Hotel. However, Visa Class A is 2.36 times less risky than Lighthouse Hotel. It trades about 0.13 of its potential returns per unit of risk. Lighthouse Hotel PLC is currently generating about -0.07 per unit of risk. If you would invest 31,478 in Visa Class A on December 30, 2024 and sell it today you would earn a total of 2,807 from holding Visa Class A or generate 8.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.32% |
Values | Daily Returns |
Visa Class A vs. Lighthouse Hotel PLC
Performance |
Timeline |
Visa Class A |
Lighthouse Hotel PLC |
Visa and Lighthouse Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Lighthouse Hotel
The main advantage of trading using opposite Visa and Lighthouse Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Lighthouse Hotel 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 Lighthouse Hotel will offset losses from the drop in Lighthouse Hotel'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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