Correlation Between Visa and Makina Takim

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

Diversification Opportunities for Visa and Makina Takim

0.56

Correlation Coefficient

Visa  Makina Takim

Very weak diversification

The 3 months correlation between Visa and Makina is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Makina Takim Endustrisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makina Takim Endustrisi 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 Makina Takim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makina Takim Endustrisi has no effect on the direction of Visa i.e., Visa and Makina Takim go up and down completely randomly.

Pair Corralation between Visa and Makina Takim

Taking into account the 90-day investment horizon Visa is expected to generate 1.59 times less return on investment than Makina Takim. But when comparing it to its historical volatility, Visa Class A is 3.54 times less risky than Makina Takim. It trades about 0.1 of its potential returns per unit of risk. Makina Takim Endustrisi is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  561.00  in Makina Takim Endustrisi on October 1, 2024 and sell it today you would earn a total of  182.00  from holding Makina Takim Endustrisi or generate 32.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Makina Takim Endustrisi

Visa Class A

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Makina Takim Endustrisi

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Makina Takim Endustrisi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Makina Takim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Makina Takim

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

The idea behind Visa Class A and Makina Takim Endustrisi 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.