Correlation Between Visa and MabCure

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

Diversification Opportunities for Visa and MabCure

0.0

Correlation Coefficient

Visa  MabCure

Pay attention - limited upside

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

Pair Corralation between Visa and MabCure

Taking into account the 90-day investment horizon Visa is expected to generate 70.39 times less return on investment than MabCure. But when comparing it to its historical volatility, Visa Class A is 77.62 times less risky than MabCure. It trades about 0.08 of its potential returns per unit of risk. MabCure is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.02  in MabCure on October 10, 2024 and sell it today you would lose (0.01) from holding MabCure or give up 50.0% of portfolio value over 90 days.

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

Visa Class A  vs.  MabCure

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.

MabCure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MabCure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, MabCure is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Visa and MabCure

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

The idea behind Visa Class A and MabCure 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.