Correlation Between Visa and Avivagen

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

Diversification Opportunities for Visa and Avivagen

0.0

Correlation Coefficient

Visa  Avivagen

Pay attention - limited upside

The 3 months correlation between Visa and Avivagen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Avivagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avivagen 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 Avivagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avivagen has no effect on the direction of Visa i.e., Visa and Avivagen go up and down completely randomly.

Pair Corralation between Visa and Avivagen

Taking into account the 90-day investment horizon Visa is expected to generate 39.06 times less return on investment than Avivagen. But when comparing it to its historical volatility, Visa Class A is 58.23 times less risky than Avivagen. It trades about 0.08 of its potential returns per unit of risk. Avivagen is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6.66  in Avivagen on October 27, 2024 and sell it today you would lose (6.65) from holding Avivagen or give up 99.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Avivagen

Visa Class A

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 18 (%) 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.

Avivagen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avivagen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Avivagen is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Visa and Avivagen

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

The idea behind Visa Class A and Avivagen 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..