Correlation Between Visa and Raisio Oyj

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

Diversification Opportunities for Visa and Raisio Oyj

-0.59

Correlation Coefficient

Visa  Raisio Oyj

Excellent diversification

The 3 months correlation between Visa and Raisio is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Raisio Oyj Vaihto osake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raisio Oyj Vaihto 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 Raisio Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raisio Oyj Vaihto has no effect on the direction of Visa i.e., Visa and Raisio Oyj go up and down completely randomly.

Pair Corralation between Visa and Raisio Oyj

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.74 times more return on investment than Raisio Oyj. However, Visa Class A is 1.36 times less risky than Raisio Oyj. It trades about 0.12 of its potential returns per unit of risk. Raisio Oyj Vaihto osake is currently generating about 0.03 per unit of risk. If you would invest  30,830  in Visa Class A on October 8, 2024 and sell it today you would earn a total of  661.00  from holding Visa Class A or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.21%
Values	Daily Returns

Visa Class A  vs.  Raisio Oyj Vaihto osake

Visa Class A

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 16 (%) 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.

Raisio Oyj Vaihto

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raisio Oyj Vaihto osake are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Raisio Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Visa and Raisio Oyj

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

The idea behind Visa Class A and Raisio Oyj Vaihto osake 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..