Correlation Between Aesapar Fundo and Visa

Can any of the company-specific risk be diversified away by investing in both Aesapar Fundo 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 Aesapar Fundo and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aesapar Fundo de and Visa Inc, you can compare the effects of market volatilities on Aesapar Fundo 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 Aesapar Fundo with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesapar Fundo and Visa.

Diversification Opportunities for Aesapar Fundo and Visa

-0.2

Correlation Coefficient

Aesapar Fundo  Visa

Good diversification

The 3 months correlation between Aesapar and Visa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and Aesapar Fundo 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 Aesapar Fundo de 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 Inc has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and Visa go up and down completely randomly.

Pair Corralation between Aesapar Fundo and Visa

Assuming the 90 days trading horizon Aesapar Fundo de is expected to under-perform the Visa. But the fund apears to be less risky and, when comparing its historical volatility, Aesapar Fundo de is 1.35 times less risky than Visa. The fund trades about -0.07 of its potential returns per unit of risk. The Visa Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,382  in Visa Inc on February 5, 2024 and sell it today you would earn a total of  436.00  from holding Visa Inc or generate 6.83% return on investment over 90 days.

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

Aesapar Fundo de  vs.  Visa Inc

Aesapar Fundo de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aesapar Fundo de has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Visa Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Visa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Visa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aesapar Fundo and Visa

The main advantage of trading using opposite Aesapar Fundo and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesapar Fundo 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.

The idea behind Aesapar Fundo de and Visa 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.