Correlation Between Visa and LeanLife Health

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

Diversification Opportunities for Visa and LeanLife Health

0.0

Correlation Coefficient

Visa  LeanLife Health

Pay attention - limited upside

The 3 months correlation between Visa and LeanLife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and LeanLife Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeanLife Health 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 LeanLife Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeanLife Health has no effect on the direction of Visa i.e., Visa and LeanLife Health go up and down completely randomly.

Pair Corralation between Visa and LeanLife Health

If you would invest  27,875  in Visa Class A on October 15, 2024 and sell it today you would earn a total of  2,896  from holding Visa Class A or generate 10.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  LeanLife Health

Visa Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) 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.

LeanLife Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LeanLife Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, LeanLife Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Visa and LeanLife Health

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

The idea behind Visa Class A and LeanLife Health 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.