Correlation Between Visa and Owens Minor
Can any of the company-specific risk be diversified away by investing in both Visa and Owens Minor 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 Owens Minor 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 Owens Minor, you can compare the effects of market volatilities on Visa and Owens Minor 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 Owens Minor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Owens Minor.
Diversification Opportunities for Visa and Owens Minor
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Owens is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Owens Minor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Minor 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 Owens Minor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Minor has no effect on the direction of Visa i.e., Visa and Owens Minor go up and down completely randomly.
Pair Corralation between Visa and Owens Minor
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.13 times more return on investment than Owens Minor. However, Visa Class A is 7.9 times less risky than Owens Minor. It trades about 0.25 of its potential returns per unit of risk. Owens Minor is currently generating about -0.05 per unit of risk. If you would invest 31,612 in Visa Class A on December 1, 2024 and sell it today you would earn a total of 4,659 from holding Visa Class A or generate 14.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. Owens Minor
Performance |
Timeline |
Visa Class A |
Owens Minor |
Visa and Owens Minor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Owens Minor
The main advantage of trading using opposite Visa and Owens Minor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Owens Minor 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 Owens Minor will offset losses from the drop in Owens Minor'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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