Correlation Between Visa and Maj Invest

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

Diversification Opportunities for Visa and Maj Invest

0.63

Correlation Coefficient

Visa  Maj Invest

Poor diversification

The 3 months correlation between Visa and Maj is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Maj Invest UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest UCITS 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest UCITS has no effect on the direction of Visa i.e., Visa and Maj Invest go up and down completely randomly.

Pair Corralation between Visa and Maj Invest

Taking into account the 90-day investment horizon Visa is expected to generate 2.11 times less return on investment than Maj Invest. In addition to that, Visa is 1.19 times more volatile than Maj Invest UCITS. It trades about 0.11 of its total potential returns per unit of risk. Maj Invest UCITS is currently generating about 0.27 per unit of volatility. If you would invest  11,090  in Maj Invest UCITS on December 19, 2024 and sell it today you would earn a total of  1,605  from holding Maj Invest UCITS or generate 14.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

Visa Class A  vs.  Maj Invest UCITS

Visa Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 8 (%) 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 April 2025.

Maj Invest UCITS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Maj Invest UCITS are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking indicators, Maj Invest sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Maj Invest

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

The idea behind Visa Class A and Maj Invest UCITS 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.