Correlation Between Mastercard and Alpha Star
Can any of the company-specific risk be diversified away by investing in both Mastercard and Alpha Star 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 and Alpha Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Alpha Star Acquisition, you can compare the effects of market volatilities on Mastercard and Alpha Star 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 with a short position of Alpha Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Alpha Star.
Diversification Opportunities for Mastercard and Alpha Star
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Alpha is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Alpha Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Star Acquisition and Mastercard 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 are associated (or correlated) with Alpha Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Star Acquisition has no effect on the direction of Mastercard i.e., Mastercard and Alpha Star go up and down completely randomly.
Pair Corralation between Mastercard and Alpha Star
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.94 times more return on investment than Alpha Star. However, Mastercard is 1.07 times less risky than Alpha Star. It trades about 0.08 of its potential returns per unit of risk. Alpha Star Acquisition is currently generating about 0.03 per unit of risk. If you would invest 34,344 in Mastercard on August 27, 2024 and sell it today you would earn a total of 17,742 from holding Mastercard or generate 51.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.53% |
| Values | Daily Returns |
Mastercard vs. Alpha Star Acquisition
Performance |
| Timeline |
| Mastercard |
| Alpha Star Acquisition |
Mastercard and Alpha Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Alpha Star
The main advantage of trading using opposite Mastercard and Alpha Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Alpha Star 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 Alpha Star will offset losses from the drop in Alpha Star's long position.| Mastercard vs. American Express | Mastercard vs. Morningstar Unconstrained Allocation | Mastercard vs. Sitka Gold Corp | Mastercard vs. MSCI ACWI exAUCONSUMER |
| Alpha Star vs. PowerUp Acquisition Corp | Alpha Star vs. Aurora Innovation | Alpha Star vs. HUMANA INC | Alpha Star vs. Aquagold International |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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