Correlation Between Mastercard and Amark Preci
Can any of the company-specific risk be diversified away by investing in both Mastercard and Amark Preci 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 Amark Preci into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Amark Preci, you can compare the effects of market volatilities on Mastercard and Amark Preci 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 Amark Preci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Amark Preci.
Diversification Opportunities for Mastercard and Amark Preci
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Amark is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Amark Preci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amark Preci 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 Amark Preci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amark Preci has no effect on the direction of Mastercard i.e., Mastercard and Amark Preci go up and down completely randomly.
Pair Corralation between Mastercard and Amark Preci
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.32 times more return on investment than Amark Preci. However, Mastercard is 3.13 times less risky than Amark Preci. It trades about 0.1 of its potential returns per unit of risk. Amark Preci is currently generating about -0.3 per unit of risk. If you would invest 50,736 in Mastercard on August 26, 2024 and sell it today you would earn a total of 1,350 from holding Mastercard or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Amark Preci
Performance |
| Timeline |
| Mastercard |
| Amark Preci |
Mastercard and Amark Preci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Amark Preci
The main advantage of trading using opposite Mastercard and Amark Preci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Amark Preci 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 Amark Preci will offset losses from the drop in Amark Preci's long position.| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
| Amark Preci vs. PJT Partners | Amark Preci vs. Scully Royalty | Amark Preci vs. Piper Sandler Companies | Amark Preci vs. Evercore Partners |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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