Correlation Between Visa and Sentinel Multi-asset
Can any of the company-specific risk be diversified away by investing in both Visa and Sentinel Multi-asset 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 Sentinel Multi-asset 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 Sentinel Multi Asset Income, you can compare the effects of market volatilities on Visa and Sentinel Multi-asset 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 Sentinel Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sentinel Multi-asset.
Diversification Opportunities for Visa and Sentinel Multi-asset
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Sentinel is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sentinel Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Multi Asset 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 Sentinel Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Multi Asset has no effect on the direction of Visa i.e., Visa and Sentinel Multi-asset go up and down completely randomly.
Pair Corralation between Visa and Sentinel Multi-asset
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.03 times more return on investment than Sentinel Multi-asset. However, Visa is 1.03 times more volatile than Sentinel Multi Asset Income. It trades about 0.11 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about -0.08 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 Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. Sentinel Multi Asset Income
Performance |
Timeline |
Visa Class A |
Sentinel Multi Asset |
Visa and Sentinel Multi-asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Sentinel Multi-asset
The main advantage of trading using opposite Visa and Sentinel Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Sentinel Multi-asset 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 Sentinel Multi-asset will offset losses from the drop in Sentinel Multi-asset's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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