Correlation Between Visa and Janus Asia

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

Diversification Opportunities for Visa and Janus Asia

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Visa and Janus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and JANUS ASIA EQUITY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Asia Equity 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 Janus Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Asia Equity has no effect on the direction of Visa i.e., Visa and Janus Asia go up and down completely randomly.

Pair Corralation between Visa and Janus Asia

Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.24 times more return on investment than Janus Asia. However, Visa is 1.24 times more volatile than Janus Asia Equity. It trades about 0.05 of its potential returns per unit of risk. Janus Asia Equity is currently generating about 0.0 per unit of risk. If you would invest  21,141  in Visa Class A on December 30, 2023 and sell it today you would earn a total of  6,767  from holding Visa Class A or generate 32.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Visa Class A  vs.  JANUS ASIA EQUITY

 Performance 
       Timeline  
Visa Class A 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Janus Asia Equity 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Janus Asia Equity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus Asia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Visa and Janus Asia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visa and Janus Asia

The main advantage of trading using opposite Visa and Janus Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Janus Asia 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 Janus Asia will offset losses from the drop in Janus Asia's long position.
The idea behind Visa Class A and Janus Asia Equity 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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