Correlation Between Western Union and Visa
Can any of the company-specific risk be diversified away by investing in both Western Union and Visa 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 Western Union and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Western Union and Visa Inc, you can compare the effects of market volatilities on Western Union and Visa 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 Western Union with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Visa.
Diversification Opportunities for Western Union and Visa
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Visa is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Western Union and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and Western Union 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 The Western Union are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of Western Union i.e., Western Union and Visa go up and down completely randomly.
Pair Corralation between Western Union and Visa
Assuming the 90 days horizon The Western Union is expected to under-perform the Visa. But the stock apears to be less risky and, when comparing its historical volatility, The Western Union is 1.14 times less risky than Visa. The stock trades about -0.12 of its potential returns per unit of risk. The Visa Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 526,728 in Visa Inc on September 24, 2024 and sell it today you would earn a total of 111,772 from holding Visa Inc or generate 21.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
The Western Union vs. Visa Inc
Performance |
Timeline |
Western Union |
Visa Inc |
Western Union and Visa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Union and Visa
The main advantage of trading using opposite Western Union and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.Western Union vs. Visa Inc | Western Union vs. Mastercard Incorporated | Western Union vs. American Express | Western Union vs. Capital One Financial |
Visa vs. Western Digital | Visa vs. Prudential Financial | Visa vs. Morgan Stanley | Visa vs. Delta Air Lines |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |