Correlation Between Visa and Fly Play

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

Diversification Opportunities for Visa and Fly Play

-0.75

Correlation Coefficient

Visa  Fly Play

Pay attention - limited upside

The 3 months correlation between Visa and Fly is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Fly Play hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fly Play hf 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 Fly Play. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fly Play hf has no effect on the direction of Visa i.e., Visa and Fly Play go up and down completely randomly.

Pair Corralation between Visa and Fly Play

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.21 times more return on investment than Fly Play. However, Visa Class A is 4.85 times less risky than Fly Play. It trades about 0.12 of its potential returns per unit of risk. Fly Play hf is currently generating about -0.08 per unit of risk. If you would invest  28,680  in Visa Class A on September 13, 2024 and sell it today you would earn a total of  2,699  from holding Visa Class A or generate 9.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Visa Class A  vs.  Fly Play hf

Visa Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) 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 January 2025.

Fly Play hf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fly Play hf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Visa and Fly Play

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

The idea behind Visa Class A and Fly Play hf 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 Stocks Directory module to find actively traded stocks across global markets.