Correlation Between Visa and Investec Emerging

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

Diversification Opportunities for Visa and Investec Emerging

-0.03

Correlation Coefficient

Visa  Investec Emerging

Good diversification

The 3 months correlation between Visa and Investec is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Visa i.e., Visa and Investec Emerging go up and down completely randomly.

Pair Corralation between Visa and Investec Emerging

Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Investec Emerging. In addition to that, Visa is 1.81 times more volatile than Investec Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.19 per unit of volatility. If you would invest  1,193  in Investec Emerging Markets on May 5, 2025 and sell it today you would earn a total of  103.00  from holding Investec Emerging Markets or generate 8.63% return on investment over 90 days.

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

Visa Class A  vs.  Investec Emerging Markets

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.

Investec Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investec Emerging Markets are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Investec Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Visa and Investec Emerging

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

The idea behind Visa Class A and Investec Emerging Markets 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..