Correlation Between Pitney Bowes and Visa
Can any of the company-specific risk be diversified away by investing in both Pitney Bowes 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 Pitney Bowes and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pitney Bowes and Visa Class A, you can compare the effects of market volatilities on Pitney Bowes 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 Pitney Bowes with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pitney Bowes and Visa.
Diversification Opportunities for Pitney Bowes and Visa
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pitney and Visa is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes 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 Pitney Bowes 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 Pitney Bowes 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 Pitney Bowes i.e., Pitney Bowes and Visa go up and down completely randomly.
Pair Corralation between Pitney Bowes and Visa
Considering the 90-day investment horizon Pitney Bowes is expected to under-perform the Visa. In addition to that, Pitney Bowes is 3.1 times more volatile than Visa Class A. It trades about -0.03 of its total potential returns per unit of risk. Visa Class A is currently generating about 0.0 per unit of volatility. If you would invest 27,070 in Visa Class A on January 21, 2024 and sell it today you would lose (92.00) from holding Visa Class A or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pitney Bowes vs. Visa Class A
Performance |
| Timeline |
| Pitney Bowes |
| Visa Class A |
Pitney Bowes and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pitney Bowes and Visa
The main advantage of trading using opposite Pitney Bowes and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pitney Bowes 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.| Pitney Bowes vs. Avalon Holdings | Pitney Bowes vs. LanzaTech Global | Pitney Bowes vs. Ambipar Emergency Response | Pitney Bowes vs. Houston Natural Resources |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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