Correlation Between Visa and MGT Capital
Can any of the company-specific risk be diversified away by investing in both Visa and MGT Capital 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 MGT Capital 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 MGT Capital Investments, you can compare the effects of market volatilities on Visa and MGT Capital 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 MGT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and MGT Capital.
Diversification Opportunities for Visa and MGT Capital
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and MGT is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and MGT Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGT Capital Investments 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 MGT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGT Capital Investments has no effect on the direction of Visa i.e., Visa and MGT Capital go up and down completely randomly.
Pair Corralation between Visa and MGT Capital
If you would invest 0.05 in MGT Capital Investments on January 25, 2024 and sell it today you would earn a total of 0.00 from holding MGT Capital Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Visa Class A vs. MGT Capital Investments
Performance |
| Timeline |
| Visa Class A |
| MGT Capital Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Visa and MGT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and MGT Capital
The main advantage of trading using opposite Visa and MGT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, MGT Capital 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 MGT Capital will offset losses from the drop in MGT Capital's long position.| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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