Correlation Between Visa and Ragnar Metals

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

Diversification Opportunities for Visa and Ragnar Metals

-0.72

Correlation Coefficient

Visa  Ragnar Metals

Pay attention - limited upside

The 3 months correlation between Visa and Ragnar is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ragnar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ragnar Metals 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 Ragnar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ragnar Metals has no effect on the direction of Visa i.e., Visa and Ragnar Metals go up and down completely randomly.

Pair Corralation between Visa and Ragnar Metals

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.24 times more return on investment than Ragnar Metals. However, Visa Class A is 4.18 times less risky than Ragnar Metals. It trades about 0.11 of its potential returns per unit of risk. Ragnar Metals is currently generating about -0.02 per unit of risk. If you would invest  31,435  in Visa Class A on December 19, 2024 and sell it today you would earn a total of  2,042  from holding Visa Class A or generate 6.5% return on investment over 90 days.

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

Visa Class A  vs.  Ragnar Metals

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 8 (%) 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.

Ragnar Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ragnar Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Ragnar Metals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Visa and Ragnar Metals

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

The idea behind Visa Class A and Ragnar Metals 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.