Correlation Between Visa and BANK OF SUZHOU

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Can any of the company-specific risk be diversified away by investing in both Visa and BANK OF SUZHOU 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 BANK OF SUZHOU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Inc and BANK OF SUZHOU, you can compare the effects of market volatilities on Visa and BANK OF SUZHOU 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 BANK OF SUZHOU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and BANK OF SUZHOU.

Diversification Opportunities for Visa and BANK OF SUZHOU

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Visa and 002966 is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Visa Inc and BANK OF SUZHOU CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF SUZHOU 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 Inc are associated (or correlated) with BANK OF SUZHOU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OF SUZHOU has no effect on the direction of Visa i.e., Visa and BANK OF SUZHOU go up and down completely randomly.

Pair Corralation between Visa and BANK OF SUZHOU

Taking into account the 90-day investment horizon Visa Inc is expected to under-perform the BANK OF SUZHOU. In addition to that, Visa is 1.15 times more volatile than BANK OF SUZHOU. It trades about 0.0 of its total potential returns per unit of risk. BANK OF SUZHOU is currently generating about 0.01 per unit of volatility. If you would invest  677.00  in BANK OF SUZHOU on June 30, 2022 and sell it today you would lose (2.00)  from holding BANK OF SUZHOU or give up 0.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy79.07%
ValuesDaily Returns

Visa Inc  vs.  BANK OF SUZHOU CO

 Performance (%) 
       Timeline  
Visa Inc 
Visa Performance
0 of 100
Over the last 90 days Visa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Visa Price Channel

BANK OF SUZHOU 
002966 Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BANK OF SUZHOU are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BANK OF SUZHOU sustained solid returns over the last few months and may actually be approaching a breakup point.

002966 Price Channel

Visa and BANK OF SUZHOU Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visa and BANK OF SUZHOU

The main advantage of trading using opposite Visa and BANK OF SUZHOU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, BANK OF SUZHOU 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 BANK OF SUZHOU will offset losses from the drop in BANK OF SUZHOU's long position.
Visa vs. Microsoft Corp
The idea behind Visa Inc and BANK OF SUZHOU 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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