Correlation Between Suntory Beverage and Mastercard
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and Mastercard 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 Suntory Beverage and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Mastercard, you can compare the effects of market volatilities on Suntory Beverage and Mastercard 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 Suntory Beverage with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Mastercard.
Diversification Opportunities for Suntory Beverage and Mastercard
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Suntory and Mastercard is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and Mastercard go up and down completely randomly.
Pair Corralation between Suntory Beverage and Mastercard
Assuming the 90 days horizon Suntory Beverage is expected to generate 6.47 times less return on investment than Mastercard. In addition to that, Suntory Beverage is 1.44 times more volatile than Mastercard. It trades about 0.01 of its total potential returns per unit of risk. Mastercard is currently generating about 0.08 per unit of volatility. If you would invest 33,469 in Mastercard on September 4, 2024 and sell it today you would earn a total of 16,771 from holding Mastercard or generate 50.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Mastercard
Performance |
| Timeline |
| Suntory Beverage Food |
| Mastercard |
Suntory Beverage and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Mastercard
The main advantage of trading using opposite Suntory Beverage and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.| Suntory Beverage vs. Tsingtao Brewery | Suntory Beverage vs. Asahi Group Holdings | Suntory Beverage vs. Kirin Holdings |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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