Correlation Between Mastercard and Barings Corporate
Can any of the company-specific risk be diversified away by investing in both Mastercard and Barings Corporate 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 Barings Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Barings Corporate Investors, you can compare the effects of market volatilities on Mastercard and Barings Corporate 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 Barings Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Barings Corporate.
Diversification Opportunities for Mastercard and Barings Corporate
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mastercard and Barings is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Barings Corporate Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Corporate 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 Barings Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Corporate has no effect on the direction of Mastercard i.e., Mastercard and Barings Corporate go up and down completely randomly.
Pair Corralation between Mastercard and Barings Corporate
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.43 times less return on investment than Barings Corporate. But when comparing it to its historical volatility, Mastercard is 1.48 times less risky than Barings Corporate. It trades about 0.08 of its potential returns per unit of risk. Barings Corporate Investors is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,134 in Barings Corporate Investors on August 26, 2024 and sell it today you would earn a total of 808.00 from holding Barings Corporate Investors or generate 71.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Barings Corporate Investors
Performance |
| Timeline |
| Mastercard |
| Barings Corporate |
Mastercard and Barings Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Barings Corporate
The main advantage of trading using opposite Mastercard and Barings Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Barings Corporate 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 Barings Corporate will offset losses from the drop in Barings Corporate's long position.| Mastercard vs. American Express | Mastercard vs. Morningstar Unconstrained Allocation | Mastercard vs. Sitka Gold Corp | Mastercard vs. MSCI ACWI exAUCONSUMER |
| Barings Corporate vs. Eaton Vance National | Barings Corporate vs. John Hancock Investors | Barings Corporate vs. MFS Municipal Income | Barings Corporate vs. RiverNorth Flexible Municipalome |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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