Correlation Between Mastercard and Eco Depot
Can any of the company-specific risk be diversified away by investing in both Mastercard and Eco Depot 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 Eco Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Eco Depot, you can compare the effects of market volatilities on Mastercard and Eco Depot 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 Eco Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Eco Depot.
Diversification Opportunities for Mastercard and Eco Depot
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mastercard and Eco is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Eco Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Depot 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 Eco Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Depot has no effect on the direction of Mastercard i.e., Mastercard and Eco Depot go up and down completely randomly.
Pair Corralation between Mastercard and Eco Depot
Allowing for the 90-day total investment horizon Mastercard is expected to generate 13.86 times less return on investment than Eco Depot. But when comparing it to its historical volatility, Mastercard is 11.85 times less risky than Eco Depot. It trades about 0.14 of its potential returns per unit of risk. Eco Depot is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Eco Depot on August 31, 2024 and sell it today you would earn a total of 1.10 from holding Eco Depot or generate 36.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Eco Depot
Performance |
| Timeline |
| Mastercard |
| Eco Depot |
Mastercard and Eco Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Eco Depot
The main advantage of trading using opposite Mastercard and Eco Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Eco Depot 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 Eco Depot will offset losses from the drop in Eco Depot's long position.| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
| Eco Depot vs. SM Prime Holdings | Eco Depot vs. Henderson Land Development | Eco Depot vs. Mitsubishi Estate Co | Eco Depot vs. New World Development |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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