Correlation Between Mastercard and Oak Woods
Can any of the company-specific risk be diversified away by investing in both Mastercard and Oak Woods 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 Oak Woods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Oak Woods Acquisition, you can compare the effects of market volatilities on Mastercard and Oak Woods 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 Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Oak Woods.
Diversification Opportunities for Mastercard and Oak Woods
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Oak is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition 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 Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of Mastercard i.e., Mastercard and Oak Woods go up and down completely randomly.
Pair Corralation between Mastercard and Oak Woods
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.05 times less return on investment than Oak Woods. But when comparing it to its historical volatility, Mastercard is 7.19 times less risky than Oak Woods. It trades about 0.24 of its potential returns per unit of risk. Oak Woods Acquisition is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Oak Woods Acquisition on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Oak Woods Acquisition or generate 0.0% 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. Oak Woods Acquisition
Performance |
| Timeline |
| Mastercard |
| Oak Woods Acquisition |
Mastercard and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Oak Woods
The main advantage of trading using opposite Mastercard and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' long position.| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
| Oak Woods vs. Toro Co | Oak Woods vs. Estee Lauder Companies | Oak Woods vs. Rocky Brands | Oak Woods vs. NioCorp Developments Ltd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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