Correlation Between Visa and Apple

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

Diversification Opportunities for Visa and Apple

-0.15

Correlation Coefficient

Visa  Apple

Good diversification

The 3 months correlation between Visa and Apple is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Visa i.e., Visa and Apple go up and down completely randomly.

Pair Corralation between Visa and Apple

Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Visa Class A is 1.27 times less risky than Apple. The stock trades about -0.02 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  17,538  in Apple Inc on May 6, 2025 and sell it today you would lose (34.00) from holding Apple Inc or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Visa Class A  vs.  Apple Inc

Visa Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Visa Class A has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Visa and Apple

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

The idea behind Visa Class A and Apple Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.