Correlation Between Mastercard and KYN Capital
Can any of the company-specific risk be diversified away by investing in both Mastercard and KYN 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 KYN Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and KYN Capital Group, you can compare the effects of market volatilities on Mastercard and KYN 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 KYN Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and KYN Capital.
Diversification Opportunities for Mastercard and KYN Capital
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mastercard and KYN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group 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 KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Mastercard i.e., Mastercard and KYN Capital go up and down completely randomly.
Pair Corralation between Mastercard and KYN Capital
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.12 times more return on investment than KYN Capital. However, Mastercard is 8.24 times less risky than KYN Capital. It trades about 0.18 of its potential returns per unit of risk. KYN Capital Group is currently generating about -0.03 per unit of risk. If you would invest 49,314 in Mastercard on August 31, 2024 and sell it today you would earn a total of 3,924 from holding Mastercard or generate 7.96% 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. KYN Capital Group
Performance |
| Timeline |
| Mastercard |
| KYN Capital Group |
Mastercard and KYN Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and KYN Capital
The main advantage of trading using opposite Mastercard and KYN Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, KYN 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 KYN Capital will offset losses from the drop in KYN Capital's long position.| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
| KYN Capital vs. Visa Class A | KYN Capital vs. Mastercard | KYN Capital vs. American Express | KYN Capital vs. PayPal Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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