Correlation Between InFintT Acquisition and Visa

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

By analyzing existing cross correlation between InFintT Acquisition Corp and Visa Class A, you can compare the effects of market volatilities on InFintT Acquisition 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 InFintT Acquisition with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of InFintT Acquisition and Visa.

Diversification Opportunities for InFintT Acquisition and Visa

-0.65

Correlation Coefficient

InFintT Acquisition  Visa

Excellent diversification

The 3 months correlation between InFintT and Visa is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding InFintT Acquisition Corp 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 InFintT Acquisition 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 InFintT Acquisition Corp 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 InFintT Acquisition i.e., InFintT Acquisition and Visa go up and down completely randomly.

Pair Corralation between InFintT Acquisition and Visa

Given the investment horizon of 90 days InFintT Acquisition Corp is expected to generate 0.22 times more return on investment than Visa. However, InFintT Acquisition Corp is 4.65 times less risky than Visa. It trades about 0.14 of its potential returns per unit of risk. Visa Class A is currently generating about -0.06 per unit of risk. If you would invest  1,137  in InFintT Acquisition Corp on March 13, 2024 and sell it today you would earn a total of  17.00  from holding InFintT Acquisition Corp or generate 1.5% return on investment over 90 days.

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

InFintT Acquisition Corp  vs.  Visa Class A

InFintT Acquisition Corp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InFintT Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, InFintT Acquisition is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Visa Class A

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with InFintT Acquisition and Visa

The main advantage of trading using opposite InFintT Acquisition and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InFintT Acquisition 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 InFintT Acquisition Corp and Visa Class A 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.