Correlation Between Visa and Worley Parsons

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

Diversification Opportunities for Visa and Worley Parsons

0.58

Correlation Coefficient

Visa  Worley Parsons

Very weak diversification

The 3 months correlation between Visa and Worley is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Worley Parsons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worley Parsons 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 Worley Parsons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worley Parsons has no effect on the direction of Visa i.e., Visa and Worley Parsons go up and down completely randomly.

Pair Corralation between Visa and Worley Parsons

Taking into account the 90-day investment horizon Visa is expected to generate 1.68 times less return on investment than Worley Parsons. But when comparing it to its historical volatility, Visa Class A is 3.82 times less risky than Worley Parsons. It trades about 0.08 of its potential returns per unit of risk. Worley Parsons is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  854.00  in Worley Parsons on December 24, 2024 and sell it today you would earn a total of  32.00  from holding Worley Parsons or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Visa Class A  vs.  Worley Parsons

Visa Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Visa is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Worley Parsons

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Worley Parsons are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Worley Parsons may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Visa and Worley Parsons

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

The idea behind Visa Class A and Worley Parsons 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 CEOs Directory module to screen CEOs from public companies around the world.