Correlation Between Visa and Chardan NexTech

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

Diversification Opportunities for Visa and Chardan NexTech

0.11

Correlation Coefficient

Visa  Chardan NexTech

Average diversification

The 3 months correlation between Visa and Chardan is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu 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 Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of Visa i.e., Visa and Chardan NexTech go up and down completely randomly.

Pair Corralation between Visa and Chardan NexTech

Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Chardan NexTech. But the stock apears to be less risky and, when comparing its historical volatility, Visa Class A is 12.74 times less risky than Chardan NexTech. The stock trades about -0.02 of its potential returns per unit of risk. The Chardan NexTech Acquisition is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Chardan NexTech Acquisition on May 7, 2025 and sell it today you would lose (25.00) from holding Chardan NexTech Acquisition or give up 49.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Chardan NexTech Acquisition

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.

Chardan NexTech Acqu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chardan NexTech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Chardan NexTech is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Visa and Chardan NexTech

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

The idea behind Visa Class A and Chardan NexTech Acquisition 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.