Correlation Between DUET Acquisition and Mastercard
Can any of the company-specific risk be diversified away by investing in both DUET Acquisition 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 DUET Acquisition and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DUET Acquisition Corp and Mastercard, you can compare the effects of market volatilities on DUET Acquisition 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 DUET Acquisition with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of DUET Acquisition and Mastercard.
Diversification Opportunities for DUET Acquisition and Mastercard
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DUET and Mastercard is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DUET Acquisition Corp and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and DUET Acquisition 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 DUET Acquisition Corp 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 DUET Acquisition i.e., DUET Acquisition and Mastercard go up and down completely randomly.
Pair Corralation between DUET Acquisition and Mastercard
Given the investment horizon of 90 days DUET Acquisition is expected to generate 5.3 times less return on investment than Mastercard. But when comparing it to its historical volatility, DUET Acquisition Corp is 4.55 times less risky than Mastercard. It trades about 0.09 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DUET Acquisition Corp vs. Mastercard
Performance |
| Timeline |
| DUET Acquisition Corp |
| Mastercard |
DUET Acquisition and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DUET Acquisition and Mastercard
The main advantage of trading using opposite DUET Acquisition and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DUET Acquisition 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.| DUET Acquisition vs. PowerUp Acquisition Corp | DUET Acquisition vs. Aurora Innovation | DUET Acquisition vs. HUMANA INC | DUET Acquisition 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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