Correlation Between Mastercard Incorporated and Grupo Nacional
Can any of the company-specific risk be diversified away by investing in both Mastercard Incorporated and Grupo Nacional 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 Mastercard Incorporated and Grupo Nacional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard Incorporated and Grupo Nacional Provincial, you can compare the effects of market volatilities on Mastercard Incorporated and Grupo Nacional 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 Mastercard Incorporated with a short position of Grupo Nacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard Incorporated and Grupo Nacional.
Diversification Opportunities for Mastercard Incorporated and Grupo Nacional
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Grupo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard Incorporated and Grupo Nacional Provincial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Nacional Provincial and Mastercard Incorporated 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 Mastercard Incorporated are associated (or correlated) with Grupo Nacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Nacional Provincial has no effect on the direction of Mastercard Incorporated i.e., Mastercard Incorporated and Grupo Nacional go up and down completely randomly.
Pair Corralation between Mastercard Incorporated and Grupo Nacional
Assuming the 90 days horizon Mastercard Incorporated is expected to generate 1.45 times more return on investment than Grupo Nacional. However, Mastercard Incorporated is 1.45 times more volatile than Grupo Nacional Provincial. It trades about 0.43 of its potential returns per unit of risk. Grupo Nacional Provincial is currently generating about 0.22 per unit of risk. If you would invest 1,041,319 in Mastercard Incorporated on November 7, 2024 and sell it today you would earn a total of 120,362 from holding Mastercard Incorporated or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Mastercard Incorporated vs. Grupo Nacional Provincial
Performance |
| Timeline |
| Mastercard Incorporated |
| Grupo Nacional Provincial |
Mastercard Incorporated and Grupo Nacional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard Incorporated and Grupo Nacional
The main advantage of trading using opposite Mastercard Incorporated and Grupo Nacional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard Incorporated position performs unexpectedly, Grupo Nacional 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 Grupo Nacional will offset losses from the drop in Grupo Nacional's long position.| Mastercard Incorporated vs. Grupo Sports World | Mastercard Incorporated vs. Verizon Communications | Mastercard Incorporated vs. GMxico Transportes SAB | Mastercard Incorporated vs. FIBRA Storage |
| Grupo Nacional vs. Honeywell International | Grupo Nacional vs. UnitedHealth Group Incorporated | Grupo Nacional vs. ConocoPhillips | Grupo Nacional vs. NOW Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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