Correlation Between Exponent and Visa
Can any of the company-specific risk be diversified away by investing in both Exponent 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 Exponent and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Visa Class A, you can compare the effects of market volatilities on Exponent 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 Exponent with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Visa.
Diversification Opportunities for Exponent and Visa
Pay attention - limited upside
The 3 months correlation between Exponent and Visa is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Exponent 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 Exponent 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 Class A has no effect on the direction of Exponent i.e., Exponent and Visa go up and down completely randomly.
Pair Corralation between Exponent and Visa
Given the investment horizon of 90 days Exponent is expected to generate 1.97 times more return on investment than Visa. However, Exponent is 1.97 times more volatile than Visa Class A. It trades about 0.15 of its potential returns per unit of risk. Visa Class A is currently generating about -0.12 per unit of risk. If you would invest 7,863 in Exponent on December 30, 2023 and sell it today you would earn a total of 406.00 from holding Exponent or generate 5.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Exponent vs. Visa Class A
Performance |
Timeline |
Exponent |
Visa Class A |
Exponent and Visa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exponent and Visa
The main advantage of trading using opposite Exponent and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent 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.Exponent vs. Jacobs Solutions | Exponent vs. Dycom Industries | Exponent vs. Innovate Corp | Exponent vs. Matrix Service Co |
Visa vs. MDB Capital Holdings | Visa vs. Orix Corp Ads | Visa vs. LendingClub Corp | Visa vs. Lexinfintech Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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