Correlation Between Visa and Nighthawk Gold
Can any of the company-specific risk be diversified away by investing in both Visa and Nighthawk Gold 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 Nighthawk Gold 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 Nighthawk Gold Corp, you can compare the effects of market volatilities on Visa and Nighthawk Gold 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 Nighthawk Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Nighthawk Gold.
Diversification Opportunities for Visa and Nighthawk Gold
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and Nighthawk is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nighthawk Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nighthawk Gold Corp 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 Nighthawk Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nighthawk Gold Corp has no effect on the direction of Visa i.e., Visa and Nighthawk Gold go up and down completely randomly.
Pair Corralation between Visa and Nighthawk Gold
If you would invest 27,883 in Visa Class A on September 6, 2024 and sell it today you would earn a total of 3,107 from holding Visa Class A or generate 11.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 1.56% |
Values | Daily Returns |
Visa Class A vs. Nighthawk Gold Corp
Performance |
Timeline |
Visa Class A |
Nighthawk Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and Nighthawk Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Nighthawk Gold
The main advantage of trading using opposite Visa and Nighthawk Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Nighthawk Gold 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 Nighthawk Gold will offset losses from the drop in Nighthawk Gold'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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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