Visa Stock Offers a Unique Beat in a Volatile Market

Visa stock has been on a tear lately, climbing 6.6% over the past five trading days as the S&P 500 slid 1.2%. This strong performance coincided with the company's recent announcement that quarterly payments volume crossed $4 trillion for the first time.

While it may be tempting to pile into Visa in hopes of catching a winning streak, the real question is what owning it does to your portfolio's risk. One key feature of Visa is its moderate correlation to the S&P 500, with a five-year correlation of 0.6. This means that while Visa shares some of the market's general direction, it also keeps a substantial amount of its behavior independent.

This independence is rooted in Visa's evolving business model, which includes growth from value-added services such as security and data analytics. These high-margin businesses diversify Visa away from simple transaction fees and provide a different rhythm to your portfolio. However, there are valid questions about international transaction revenue, which grew only 6%, well below the 12% growth in volume.