Correlation Between Visa and Schroder ImmoPLUS

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

Diversification Opportunities for Visa and Schroder ImmoPLUS

0.62

Correlation Coefficient

Visa  Schroder ImmoPLUS

Poor diversification

The 3 months correlation between Visa and Schroder is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Schroder ImmoPLUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder ImmoPLUS 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 Schroder ImmoPLUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder ImmoPLUS has no effect on the direction of Visa i.e., Visa and Schroder ImmoPLUS go up and down completely randomly.

Pair Corralation between Visa and Schroder ImmoPLUS

Taking into account the 90-day investment horizon Visa is expected to generate 3.29 times less return on investment than Schroder ImmoPLUS. But when comparing it to its historical volatility, Visa Class A is 1.16 times less risky than Schroder ImmoPLUS. It trades about 0.06 of its potential returns per unit of risk. Schroder ImmoPLUS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  16,750  in Schroder ImmoPLUS on September 28, 2024 and sell it today you would earn a total of  600.00  from holding Schroder ImmoPLUS or generate 3.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Visa Class A  vs.  Schroder ImmoPLUS

Visa Class A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) 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.

Schroder ImmoPLUS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schroder ImmoPLUS are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish forward indicators, Schroder ImmoPLUS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Visa and Schroder ImmoPLUS

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

The idea behind Visa Class A and Schroder ImmoPLUS 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.