Correlation Between DMY Squared and Mastercard
Can any of the company-specific risk be diversified away by investing in both DMY Squared 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 DMY Squared and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between dMY Squared Technology and Mastercard, you can compare the effects of market volatilities on DMY Squared 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 DMY Squared with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMY Squared and Mastercard.
Diversification Opportunities for DMY Squared and Mastercard
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DMY and Mastercard is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding dMY Squared Technology and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and DMY Squared 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 dMY Squared Technology 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 DMY Squared i.e., DMY Squared and Mastercard go up and down completely randomly.
Pair Corralation between DMY Squared and Mastercard
Given the investment horizon of 90 days DMY Squared is expected to generate 45.27 times less return on investment than Mastercard. But when comparing it to its historical volatility, dMY Squared Technology is 2.72 times less risky than Mastercard. It trades about 0.01 of its potential returns per unit of risk. Mastercard is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 41,198 in Mastercard on August 27, 2024 and sell it today you would earn a total of 10,888 from holding Mastercard or generate 26.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
dMY Squared Technology vs. Mastercard
Performance |
| Timeline |
| dMY Squared Technology |
| Mastercard |
DMY Squared and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMY Squared and Mastercard
The main advantage of trading using opposite DMY Squared and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMY Squared 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.| DMY Squared vs. PowerUp Acquisition Corp | DMY Squared vs. Aurora Innovation | DMY Squared vs. HUMANA INC | DMY Squared vs. Aquagold International |
| Mastercard vs. American Express | Mastercard vs. Morningstar Unconstrained Allocation | Mastercard vs. Sitka Gold Corp | Mastercard vs. MSCI ACWI exAUCONSUMER |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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