Correlation Between ETFMG Travel and Visa
Can any of the company-specific risk be diversified away by investing in both ETFMG Travel 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 ETFMG Travel and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFMG Travel Tech and Visa Class A, you can compare the effects of market volatilities on ETFMG Travel 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 ETFMG Travel with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFMG Travel and Visa.
Diversification Opportunities for ETFMG Travel and Visa
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ETFMG and Visa is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ETFMG Travel Tech and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and ETFMG Travel 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 ETFMG Travel Tech 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 Class A has no effect on the direction of ETFMG Travel i.e., ETFMG Travel and Visa go up and down completely randomly.
Pair Corralation between ETFMG Travel and Visa
Given the investment horizon of 90 days ETFMG Travel Tech is expected to generate 1.38 times more return on investment than Visa. However, ETFMG Travel is 1.38 times more volatile than Visa Class A. It trades about -0.22 of its potential returns per unit of risk. Visa Class A is currently generating about -0.38 per unit of risk. If you would invest 2,041 in ETFMG Travel Tech on January 20, 2024 and sell it today you would lose (105.00) from holding ETFMG Travel Tech or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETFMG Travel Tech vs. Visa Class A
Performance |
| Timeline |
| ETFMG Travel Tech |
| Visa Class A |
ETFMG Travel and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFMG Travel and Visa
The main advantage of trading using opposite ETFMG Travel and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFMG Travel 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.| ETFMG Travel vs. Consumer Staples Select | ETFMG Travel vs. Industrial Select Sector | ETFMG Travel vs. Materials Select Sector | ETFMG Travel vs. Health Care Select |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |