Correlation Between Visa and Hennessy Stance
Can any of the company-specific risk be diversified away by investing in both Visa and Hennessy Stance 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 Hennessy Stance 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 Hennessy Stance ESG, you can compare the effects of market volatilities on Visa and Hennessy Stance 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 Hennessy Stance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Hennessy Stance.
Diversification Opportunities for Visa and Hennessy Stance
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Visa and Hennessy is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Hennessy Stance ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Stance ESG 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 Hennessy Stance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Stance ESG has no effect on the direction of Visa i.e., Visa and Hennessy Stance go up and down completely randomly.
Pair Corralation between Visa and Hennessy Stance
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.4 times more return on investment than Hennessy Stance. However, Visa is 1.4 times more volatile than Hennessy Stance ESG. It trades about -0.02 of its potential returns per unit of risk. Hennessy Stance ESG is currently generating about -0.24 per unit of risk. If you would invest 31,379 in Visa Class A on October 12, 2024 and sell it today you would lose (119.00) from holding Visa Class A or give up 0.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Visa Class A vs. Hennessy Stance ESG
Performance |
Timeline |
Visa Class A |
Hennessy Stance ESG |
Visa and Hennessy Stance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and Hennessy Stance
The main advantage of trading using opposite Visa and Hennessy Stance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Hennessy Stance 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 Hennessy Stance will offset losses from the drop in Hennessy Stance's long position.Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
Hennessy Stance vs. iShares ESG Screened | Hennessy Stance vs. Innovator Equity Accelerated | Hennessy Stance vs. iShares ESG Screened | Hennessy Stance vs. Innovator Equity Accelerated |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |