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An easy way to lower the risk profile of your stock portfolioThe correlation between Visa and Mastercard creates an interesting investment trick. I began this analysis not even looking for the correlation between these two companies' stock prices. But rather I was looking for some chart patterns using a stock screener. At the top of the list, these two companies emerged. As usual, I was going to go through the stock charts of all the companies in the list briefly to determine if they hold any chart pattern merit. However, as I scanned over Visa, and then Mastercard, I noticed they looked extremely similar. Weird. I then opened up Tradingview and put these stocks in. Side by side they look the same. These two companies have very similar price movements. No surprise, they are very similar companies. They are direct competitors. They are both big players in the global credit services market. Transacting trillions of dollars in total payments volumes per year. They’re both tech companies that connect the consumer and the merchant digitally for transactions. They have been seen as rivals for over a decade now. Neither Visa nor Mastercard are involved in extending credit or issuing cards. They work in a co-branded relationship with the card provider. That's why you will see their logos on your credit card but won’t see a full absolute Mastercard/Visa credit card. Visa is generally larger in terms of the transaction, purchase volume and cards in circulation. However, Mastercard growth has been picking up and may see a catch-up. Now let’s get back to the price movement analysis. I have split this up into three time periods and then done a Pearson Correlation Test. The first period is the matched IPO date to the current date. The next is the last 5 years and then the last 2 years. The reason for the three time periods is simple. I want to do a full IPO to current date analysis to get the full picture and long-term perspective. A 5-year analysis because if you look at the charts above, that’s when the volatility in the stocks picks up. The last 2 years, because if you look again at the charts above, some crazy price movements have been occurring in the last two years that do not follow the past 14-year trend. The closer to +1, the closer the correlation. March 2008 - Nov 2022: 0.83 Nov 2017 - Nov 2022: 0.92 Nov 2020 - Nov 2022: 0.90 As you can see from the above stats both of these stocks have a close relationship with each other. A higher correlation in recent years. Of course, correlation doesn’t mean causation. However, the fact that these two companies are very similar and direct competitors means that one could form a reasonable conclusion. Not that one stock is affecting the other price. But rather than investors see these two companies as very similar. Such that when they exit one, they exit the other. Unless there is a big reason not to. But as you can see from the stats above. The stocks have a close correlation over the last 14 years such that even if one says that, let, for example, Visa is going to grow faster than Mastercard, the chances are - Mastercard wouldn’t be far behind. Henceforth, this leads to an interesting investment tip: Let’s say you want to diversify your portfolio by gaining some exposure to the credit services industry. Since Visa and Mastercard are the two leading companies, you chose them. However, you only have enough money to invest in one. But you also want to lower the risk profile of your portfolio. Is there a way both can be done? The answer is yes, since Visa and Mastercard have such a close correlation and are very big established companies they will most likely follow each other in price movement. Also, since they are two different companies, you will be diversifying your investment and will be lowering your risk. So, you divide that last portion of your portfolio into two smaller portions and buy Visa and Mastercard 50:50. This will mean you get the exposure you are after, the returns as well since they have a close correlation, and the risk is lowered since they are two separate companies. Quite a cool trick is not it? I created three different portfolios. Each beginning with $10,000. I invested the full out in two of them into Visa and Mastercard. The last portfolio had a 50:50 split. I then calculated the standard daily deviation and the annualized standard deviation. Here are the results: Visa 100%: Start value: $10,000 End value: $137,295.57 Annualized STD: 29.60% Mastercard 100%: Start value: $10,000 End value: $151,466.00 Annualized STD: 32.30% Visa 50% Mastercard 50%: Start value: $10,000 End value: $144,380.79 Annualized STD: 29.50% As you can see from the above stats, once the two stocks have been combined the standard deviation drops by 8.67% and the standard deviation is lower than the two stocks individually. This means the risk is lower. However, yes, the final value isn’t as high as the Mastercard 100% the returns are higher than the sole Visa 100% portfolio by 5.10%. So, in other words, the risk has been lowered than if you had individual portfolios and the returns are higher as well. Of course, the returns aren’t as high as they are in the Mastercard 100% portfolio, but the risk is lower while still ensuring higher returns. This means the Visa 50% Mastercard 50% portfolio provides an effective way to reduce risk while increasing returns. However, one thing to note is the maximum drawdown was the lowest in the Mastercard 100% portfolio. The second lowest is Visa 50% Mastercard 50%. Highest in Visa 50%. So, ensure that if you are going to follow this strategy, there is more research to be done and it is best worked in a long-term investment strategy possibly combined with dollar cost averaging. To conclude, if you want to see a higher return while lowering the risk profile of your portfolio. It pays to diversify with similar correlating assets.
NYSE:V
by BlackbearTrader
NEOUSD Weekly Analyses NEOUSD seems to be forming descending wedge pattern. Last year NEO topped at $130+ it's also one of the coin which failed to break All time high like IOTA, XRP, DASH, BCH. but now it seems it's finally getting the momentum back. this chart shows that NEO will probably hit all time high around by the end of 2023 (time is very hard to predict). but here we go lol I am expecting a bull run to $400. so many people are bearish in the market right now. but i think bears are going to get REKT very soon.
Long
by Bitsleader
1
GOLD - potential swing longs from POIDear traders, Finally, GOLD has shown a reaction from a weekly POI. Potential buys are incoming. The price might drop down to test the demand zone before going higher. At the same time, it can just continue higher without any retracement. Anyway, we must REACT NOT PREDICT! Wait for a confirmation and use your own strategy for entry to get involved. Don't forget to manage your risk properly. DISCIPLINE Strive for patience, perseverance, determination, & rational action. Limit your losses, use stops. Never cancel a stop loss order after you have placed it! It's just an idea of mine. However, everyone can share their thoughts in the comment section below. Also, don't forget to support me! :) Disclaimer: Trade at your own risk. I'm sharing my ideas and not giving trading advice. Always plan your trade and trade your plan.
OANDA:XAUUSDLong
by d13wish
GRT Next Bull Run Coming?Entry for Spot Trading: $0.08 The Graph is an open-sourced software used to collect, process and store data from various blockchain applications to facilitate information retrieval. AI and Big Data will be our future. The GRT cryptocurrency derives its value from its ability to ensure the successful execution of smart contracts that depend on the The Graph protocol. Most notably, GRT is the only cryptocurrency used for key network operations. For example, consumers who submit queries to indexers must pay a query fee, denominated in GRT. We need patience, waiting for next bull run. This is Week TF, Future trading is not recommened. ________________________ If this is your first time coming to my idea, thank you very much for taking the time to pay attention to it. My opinions are all subjective and personal. It might be right, or wrong, but there is one thing I can guarantee you will never go wrong - always set the SL for each entry before setting the TP for it. Don't forget to Follow, and comment your thoughts below, or simply a Boost button if you found it helpful. That encourages me a lot to share my ideas!
Long
by BuyDinhSellDay
2
Long in bear market opportunity!This is my plan for Hathor Networks. I see great things in the projects future. This is a SPOT trade for long term large gains but can be modified as you see fit. Levels are all on chart. I will be buying from here down and riding it to the top which could be two or more years but I doubt it. There are also good TP's on there or for shorter term any variation of those will work. I am accumulating this coin anyway so I am not worried about downside potential. This is just a great entry point in my opinion as well as a good opportunity for other to check out $HTR! I don't publish my trades usually but figured I would this time. Hope it helps.
Long
by Z3R0-G3N3S1S
3
LONG AGIXUSDT SPOT TRADE FOR ACCUMULATION BUT ADDED TRADE IDEAThis is one of my favorite cryptos. $AGIX is an AI based project that has incredible fundamentals. I put a trade setup but could care less about it because I will keep accumulating as many bags of this as possible for next cycle. I do feel this trade will be profitable though but the better bet is to hodl it and keep adding. Sell at 50-100x or more next bull run. Of course take profits along the way but this is a killer project. Everyone should do your own research but I think you will agree this is a true crypto GEM. No leverage just spot and is on KuCoin on the USDT and ETH Pairing. Not financial advice but grab some moon bags and hodl this token!
ALong
by Z3R0-G3N3S1S
1
S&P 500 INDEX 04 nov 2022 Long Term Analysis (Daily Time Frame)Hi everyone, Here is my 04 November 2022 long term S&P 500 INDEX analysis. #SPX To date ( 04 Nov 2022) I have deduced that the market offers two scenarios. The first one (the most likely one in view of the geopolitical and economic conditions from a macroeconomic point of view) would be a continuation of the decline. I have estimated this scenario to have an 80% chance of success, either from a technical point of view or 25 out of 26 indicators are either neutral or bearish. Or from a macro economic point of view where today we have just learned that the unemployment rate is back on the rise (3.7%). The second scenario, less likely, would be to follow the rise of the second half of October, then succeed in reversing the trend and breaking the descending channel in order to resume a long-term uptrend. 20% chance of success. RED SCENARIO: Personally and in view of the different technical and economic factors I think that the red scenario has a better chance of being realized. It is not unlikely in the coming months that we will return to test the support area of $3550 or even that we break it to continue the decline. The economic conditions to continue the decline are mostly met, they will remain to break with high volume down this support area while remaining in the channel. Once this support zone is broken, we have a very high probability of testing the support line of $3235 and why not that of $3000. However, beware of the latter, which is a psychological level that is very popular with traders. And finally if the conditions have not improved by then, or even worse have deteriorated. We could "maybe" have a continuation of the decline to the low reached during the covid, ie to the resistance zone of $2250 This final hypothesis is really to be taken lightly. BLUE SCENARIO: Much less evident the blue scenario is still not impossible, it would require however many conditions which are for the moment not present. The first and most important would be global economic conditions (Decrease of embargoes with Russia, Decrease of interest rates, Decrease of inflation, Decrease of unemployment rates etc...) Secondly and simultaneously it would be necessary that the technical indicators begin to consider a reversal (Important RSI divergence in Daily see in weekly, crossing of the mobile averages etc...) And thirdly, and strongly helped by the first two conditions, the price should break the bearish channel with high volume to consider a possible reversal. During this break we would have a strong chance to observe a reversal pattern and probably a strong RSI divergence. If all these conditions are met, then we could envisage a long-term upward turnaround. Conclusion: For now the S&P500 is bearish and has a strong chance to continue its fall in this bearish channel, however we do not lose hope to see a reversal happen in a few months/years. For that we will have to respect some conditions but as we know in the financial markets, nothing is impossible. If you have any questions, I remain at your disposal in the comment space.
SP:SPXLong
by UnknownUnicorn35464780
1
USDCAD buy and sell areas LONG TERM!Looking on the daily we can see that price is proven to struggle around the 1.38 resistances so I have highlighted that as a nice long term short area... BUT also price has broken the long term bullish structure with the USD bulls stepping back in can we see a push push higher? (I have 1.35 highlighted as a nice buy zone which is also previous lower high). Fundamentals for both USD and CAD today so be careful entering any trades around these times! Also this is just my opinion so make sure you do your own analysis as well! trade safe and smart and let me know your opinions in the comments!!
Long
by jamison_fx
BTCUSDT 01 Nov 2022 Long Term Analysis (Daily)Following a large number of requests here is my 01 November 2022 long term $BTC / $USDT analysis. #BTC I have made this analysis of the BTC USDT in order to determine a safe entry point for a long term investment. To date (01 Nov 2022) I have deduced that the market offers two scenarios. The first one (the most likely one in view of the geopolitical and economic conditions from a macroeconomic point of view) would be a continuation of the decline. I estimated the latter using the Crypto Fear & Greed Index of the alternative.me website with a 70% chance of realization. The second, less likely scenario would be following the pump that we had this week a reversal of the trend in order to go back up on the long term. 30% chance of success. I have determined that the red scenario has a better chance of happening for various reasons: - Firstly the global economic conditions do not allow for a bullish reversal. - Secondly, we have a bearish divergence in the daily chart this week. - Thirdly the $18500 / $22500 range has not had a confirmed breakout with enough volume to speak of a long term reversal. - Fourth, the failure of last week's pump at the $20,800 resistance. At this time with the information we have I recommend not to buy BTC. Of course I would like to remind you that I am not a fortune teller, nobody can know how the market will behave. However, we can analyze it and with the help of the past and statistics, try to find the best entry and exit points However, if you have any questions, I remain at your disposal in the comment space. THIS IS NOT INVESTMENT ADVICE
Long
by UnknownUnicorn35464780
4
NEXT BULL RUN 🚀 ( bitcoin and Altcoin) BITCOIN LONG TERM : We finally got breakout Sometimes to stand again we must fall and We have already fallen So.......it's time to go up Bitcoin gave many opportunities to get rich Going back to history, the first opportunity was at $2,500 in 2017 The second chance was in 2019 when the price of Bitcoin fell $ 3000 And the opportunity now will be at $ 17500-21000 Get ready for 90000 dollars It will be a really fast and powerful rise!
by UnknownUnicorn37652581