Correlation Between Visa and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Visa and Sterling Capital 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 Sterling Capital 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 Sterling Capital Porate, you can compare the effects of market volatilities on Visa and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sterling Capital.
Diversification Opportunities for Visa and Sterling Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Sterling is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sterling Capital Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Porate 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Porate has no effect on the direction of Visa i.e., Visa and Sterling Capital go up and down completely randomly.
Pair Corralation between Visa and Sterling Capital
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.89 times more return on investment than Sterling Capital. However, Visa is 1.89 times more volatile than Sterling Capital Porate. It trades about 0.11 of its potential returns per unit of risk. Sterling Capital Porate is currently generating about 0.03 per unit of risk. If you would invest 32,037 in Visa Class A on December 26, 2024 and sell it today you would earn a total of 2,381 from holding Visa Class A or generate 7.43% 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. Sterling Capital Porate
Performance |
Timeline |
Visa Class A |
Sterling Capital Porate |
Visa and Sterling Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Sterling Capital
The main advantage of trading using opposite Visa and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
Sterling Capital vs. Us Government Plus | Sterling Capital vs. Limited Term Tax | Sterling Capital vs. Bbh Intermediate Municipal | Sterling Capital vs. T Rowe Price |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |