Correlation Between Visa and Fisher Investments

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

Diversification Opportunities for Visa and Fisher Investments

0.68

Correlation Coefficient

Visa  Fisher Investments

Poor diversification

The 3 months correlation between Visa and Fisher is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Fisher Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Fixed Income 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 Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Fixed Income has no effect on the direction of Visa i.e., Visa and Fisher Investments go up and down completely randomly.

Pair Corralation between Visa and Fisher Investments

Taking into account the 90-day investment horizon Visa Class A is expected to generate 3.58 times more return on investment than Fisher Investments. However, Visa is 3.58 times more volatile than Fisher Fixed Income. It trades about 0.15 of its potential returns per unit of risk. Fisher Fixed Income is currently generating about 0.15 per unit of risk. If you would invest  31,812  in Visa Class A on December 27, 2024 and sell it today you would earn a total of  3,174  from holding Visa Class A or generate 9.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Fisher Fixed Income

Visa Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) 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 April 2025.

Fisher Fixed Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Fixed Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Fisher Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and Fisher Investments

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

The idea behind Visa Class A and Fisher Fixed Income 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..