Correlation Between Mastercard and Cactus Acquisition
Can any of the company-specific risk be diversified away by investing in both Mastercard and Cactus Acquisition 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 Cactus Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Cactus Acquisition Corp, you can compare the effects of market volatilities on Mastercard and Cactus Acquisition 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 Cactus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Cactus Acquisition.
Diversification Opportunities for Mastercard and Cactus Acquisition
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Cactus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Cactus Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Acquisition Corp 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 Cactus Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Acquisition Corp has no effect on the direction of Mastercard i.e., Mastercard and Cactus Acquisition go up and down completely randomly.
Pair Corralation between Mastercard and Cactus Acquisition
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.59 times more return on investment than Cactus Acquisition. However, Mastercard is 1.7 times less risky than Cactus Acquisition. It trades about 0.09 of its potential returns per unit of risk. Cactus Acquisition Corp is currently generating about 0.02 per unit of risk. If you would invest 38,722 in Mastercard on August 26, 2024 and sell it today you would earn a total of 13,364 from holding Mastercard or generate 34.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Cactus Acquisition Corp
Performance |
| Timeline |
| Mastercard |
| Cactus Acquisition Corp |
Mastercard and Cactus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Cactus Acquisition
The main advantage of trading using opposite Mastercard and Cactus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Cactus Acquisition 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 Cactus Acquisition will offset losses from the drop in Cactus Acquisition's long position.| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
| Cactus Acquisition vs. PowerUp Acquisition Corp | Cactus Acquisition vs. Aurora Innovation | Cactus Acquisition vs. HUMANA INC | Cactus Acquisition 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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