Correlation Between Mastercard and Eagle Capital
Can any of the company-specific risk be diversified away by investing in both Mastercard and Eagle Capital 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 Eagle Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Eagle Capital Growth, you can compare the effects of market volatilities on Mastercard and Eagle Capital 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 Eagle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Eagle Capital.
Diversification Opportunities for Mastercard and Eagle Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mastercard and Eagle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Eagle Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Capital Growth 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 Eagle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Capital Growth has no effect on the direction of Mastercard i.e., Mastercard and Eagle Capital go up and down completely randomly.
Pair Corralation between Mastercard and Eagle Capital
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.55 times more return on investment than Eagle Capital. However, Mastercard is 1.8 times less risky than Eagle Capital. It trades about 0.08 of its potential returns per unit of risk. Eagle Capital Growth is currently generating about 0.03 per unit of risk. If you would invest 36,393 in Mastercard on August 28, 2024 and sell it today you would earn a total of 16,267 from holding Mastercard or generate 44.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.74% |
| Values | Daily Returns |
Mastercard vs. Eagle Capital Growth
Performance |
| Timeline |
| Mastercard |
| Eagle Capital Growth |
Mastercard and Eagle Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Eagle Capital
The main advantage of trading using opposite Mastercard and Eagle Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Eagle Capital 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 Eagle Capital will offset losses from the drop in Eagle Capital's long position.| Mastercard vs. American Express | Mastercard vs. Morningstar Unconstrained Allocation | Mastercard vs. Sitka Gold Corp | Mastercard vs. MSCI ACWI exAUCONSUMER |
| Eagle Capital vs. Eaton Vance New | Eagle Capital vs. Pimco New York | Eagle Capital vs. Nuveen Amt Free Municipal | Eagle Capital vs. Western Asset Municipal |
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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