Correlation Between Visa and Embraer SA
Can any of the company-specific risk be diversified away by investing in both Visa and Embraer SA 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 Embraer SA 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 Embraer SA ADR, you can compare the effects of market volatilities on Visa and Embraer SA 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 Embraer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Embraer SA.
Diversification Opportunities for Visa and Embraer SA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Embraer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Embraer SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embraer SA ADR 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 Embraer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embraer SA ADR has no effect on the direction of Visa i.e., Visa and Embraer SA go up and down completely randomly.
Pair Corralation between Visa and Embraer SA
If you would invest 6,448 in Embraer SA ADR on September 9, 2025 and sell it today you would earn a total of 0.00 from holding Embraer SA ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Visa Class A vs. Embraer SA ADR
Performance |
| Timeline |
| Visa Class A |
| Embraer SA ADR |
Risk-Adjusted Performance
Fair
Weak | Strong |
Visa and Embraer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Embraer SA
The main advantage of trading using opposite Visa and Embraer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Embraer SA 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 Embraer SA will offset losses from the drop in Embraer SA's long position.The idea behind Visa Class A and Embraer SA ADR 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.| Embraer SA vs. Huntington Ingalls Industries | Embraer SA vs. Leonardo DRS, Common | Embraer SA vs. Textron | Embraer SA vs. Topbuild Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |