Correlation Between Visa and NISOURCE
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By analyzing existing cross correlation between Visa Class A and NISOURCE FIN P, you can compare the effects of market volatilities on Visa and NISOURCE 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 NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NISOURCE.
Diversification Opportunities for Visa and NISOURCE
Very poor diversification
The 3 months correlation between Visa and NISOURCE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Visa i.e., Visa and NISOURCE go up and down completely randomly.
Pair Corralation between Visa and NISOURCE
Taking into account the 90-day investment horizon Visa is expected to generate 5.58 times less return on investment than NISOURCE. But when comparing it to its historical volatility, Visa Class A is 1.41 times less risky than NISOURCE. It trades about 0.08 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 10,400 in NISOURCE FIN P on September 24, 2024 and sell it today you would earn a total of 263.00 from holding NISOURCE FIN P or generate 2.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 30.0% |
Values | Daily Returns |
Visa Class A vs. NISOURCE FIN P
Performance |
Timeline |
Visa Class A |
NISOURCE FIN P |
Visa and NISOURCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Visa and NISOURCE
The main advantage of trading using opposite Visa and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NISOURCE 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 NISOURCE will offset losses from the drop in NISOURCE's long position.Visa vs. American Express | Visa vs. Upstart Holdings | Visa vs. Capital One Financial | Visa vs. Ally Financial |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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