Correlation Between Visa and OSG America

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

Diversification Opportunities for Visa and OSG America

0.0

Correlation Coefficient

Visa  OSG America

Pay attention - limited upside

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

Pair Corralation between Visa and OSG America

If you would invest  26,221  in Visa Class A on September 29, 2024 and sell it today you would earn a total of  5,645  from holding Visa Class A or generate 21.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Visa Class A  vs.  OSG America LP

Visa Class A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) 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.

OSG America LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OSG America LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, OSG America is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Visa and OSG America

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

The idea behind Visa Class A and OSG America LP 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.