Correlation Between Visa and Saniona AB

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

Diversification Opportunities for Visa and Saniona AB

0.24

Correlation Coefficient

Visa  Saniona AB

Modest diversification

The 3 months correlation between Visa and Saniona is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Saniona AB TO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saniona AB TO 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 Saniona AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saniona AB TO has no effect on the direction of Visa i.e., Visa and Saniona AB go up and down completely randomly.

Pair Corralation between Visa and Saniona AB

Taking into account the 90-day investment horizon Visa is expected to generate 10.4 times less return on investment than Saniona AB. But when comparing it to its historical volatility, Visa Class A is 18.44 times less risky than Saniona AB. It trades about 0.19 of its potential returns per unit of risk. Saniona AB TO is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Saniona AB TO on October 23, 2024 and sell it today you would earn a total of  55.00  from holding Saniona AB TO or generate 55.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Visa Class A  vs.  Saniona AB TO

Visa Class A

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 15 (%) 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.

Saniona AB TO

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB TO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Saniona AB

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

The idea behind Visa Class A and Saniona AB TO 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.