Correlation Between Visa and QUICKSTEP HLDGS

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

Diversification Opportunities for Visa and QUICKSTEP HLDGS

0.28

Correlation Coefficient

Visa  QUICKSTEP HLDGS

Modest diversification

The 3 months correlation between Visa and QUICKSTEP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and QUICKSTEP HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUICKSTEP HLDGS 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 QUICKSTEP HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUICKSTEP HLDGS has no effect on the direction of Visa i.e., Visa and QUICKSTEP HLDGS go up and down completely randomly.

Pair Corralation between Visa and QUICKSTEP HLDGS

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.45 times more return on investment than QUICKSTEP HLDGS. However, Visa Class A is 2.25 times less risky than QUICKSTEP HLDGS. It trades about 0.16 of its potential returns per unit of risk. QUICKSTEP HLDGS is currently generating about 0.01 per unit of risk. If you would invest  31,478  in Visa Class A on December 29, 2024 and sell it today you would earn a total of  3,508  from holding Visa Class A or generate 11.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Visa Class A  vs.  QUICKSTEP HLDGS

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 12 (%) 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.

QUICKSTEP HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days QUICKSTEP HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, QUICKSTEP HLDGS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Visa and QUICKSTEP HLDGS

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

The idea behind Visa Class A and QUICKSTEP HLDGS 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.