Correlation Between Visa and CompX International

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

Diversification Opportunities for Visa and CompX International

-0.2

Correlation Coefficient

Visa  CompX International

Good diversification

The 3 months correlation between Visa and CompX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and CompX International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompX International 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 CompX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompX International has no effect on the direction of Visa i.e., Visa and CompX International go up and down completely randomly.

Pair Corralation between Visa and CompX International

Taking into account the 90-day investment horizon Visa is expected to generate 2.09 times less return on investment than CompX International. But when comparing it to its historical volatility, Visa Class A is 3.78 times less risky than CompX International. It trades about 0.07 of its potential returns per unit of risk. CompX International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,564  in CompX International on July 19, 2025 and sell it today you would earn a total of  760.00  from holding CompX International or generate 48.59% 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.  CompX International

Visa Class A

Risk-Adjusted Performance

Weakest

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.

CompX International

Risk-Adjusted Performance

Weakest

Over the last 90 days CompX International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, CompX International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and CompX International

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

The idea behind Visa Class A and CompX International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.