Correlation Between SPORT LISBOA and Mastercard
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA 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 SPORT LISBOA and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and Mastercard, you can compare the effects of market volatilities on SPORT LISBOA 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 SPORT LISBOA with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and Mastercard.
Diversification Opportunities for SPORT LISBOA and Mastercard
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPORT and Mastercard is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and SPORT LISBOA 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 SPORT LISBOA E 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 SPORT LISBOA i.e., SPORT LISBOA and Mastercard go up and down completely randomly.
Pair Corralation between SPORT LISBOA and Mastercard
Assuming the 90 days horizon SPORT LISBOA E is expected to generate 2.18 times more return on investment than Mastercard. However, SPORT LISBOA is 2.18 times more volatile than Mastercard. It trades about 0.15 of its potential returns per unit of risk. Mastercard is currently generating about 0.05 per unit of risk. If you would invest 306.00 in SPORT LISBOA E on September 13, 2024 and sell it today you would earn a total of 20.00 from holding SPORT LISBOA E or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. Mastercard
Performance |
| Timeline |
| SPORT LISBOA E |
| Mastercard |
SPORT LISBOA and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and Mastercard
The main advantage of trading using opposite SPORT LISBOA and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA 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.| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Charter Communications | SPORT LISBOA vs. Warner Music Group | SPORT LISBOA vs. Superior Plus Corp |
| Mastercard vs. SPORT LISBOA E | Mastercard vs. Sportsmans Warehouse Holdings | Mastercard vs. Gaztransport Technigaz SA | Mastercard vs. Scientific Games |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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