Correlation Between Visa and SKAGEN AVKASTNING

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

Diversification Opportunities for Visa and SKAGEN AVKASTNING

0.85

Correlation Coefficient

Visa  SKAGEN AVKASTNING

Very poor diversification

The 3 months correlation between Visa and SKAGEN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and SKAGEN AVKASTNING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAGEN AVKASTNING 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 SKAGEN AVKASTNING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAGEN AVKASTNING has no effect on the direction of Visa i.e., Visa and SKAGEN AVKASTNING go up and down completely randomly.

Pair Corralation between Visa and SKAGEN AVKASTNING

Taking into account the 90-day investment horizon Visa Class A is expected to generate 4.5 times more return on investment than SKAGEN AVKASTNING. However, Visa is 4.5 times more volatile than SKAGEN AVKASTNING. It trades about 0.1 of its potential returns per unit of risk. SKAGEN AVKASTNING is currently generating about 0.08 per unit of risk. If you would invest  20,183  in Visa Class A on September 18, 2024 and sell it today you would earn a total of  11,624  from holding Visa Class A or generate 57.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.4%
Values	Daily Returns

Visa Class A  vs.  SKAGEN AVKASTNING

Visa Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SKAGEN AVKASTNING

Risk-Adjusted Performance

88 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in SKAGEN AVKASTNING are ranked lower than 88 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, SKAGEN AVKASTNING is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and SKAGEN AVKASTNING

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

The idea behind Visa Class A and SKAGEN AVKASTNING 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.