Correlation Between Mastercard and Oxford Square
Can any of the company-specific risk be diversified away by investing in both Mastercard and Oxford Square 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 Oxford Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Oxford Square Capital, you can compare the effects of market volatilities on Mastercard and Oxford Square 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 Oxford Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Oxford Square.
Diversification Opportunities for Mastercard and Oxford Square
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Oxford is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital 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 Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of Mastercard i.e., Mastercard and Oxford Square go up and down completely randomly.
Pair Corralation between Mastercard and Oxford Square
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.21 times more return on investment than Oxford Square. However, Mastercard is 1.21 times more volatile than Oxford Square Capital. It trades about 0.33 of its potential returns per unit of risk. Oxford Square Capital is currently generating about 0.36 per unit of risk. If you would invest 52,161 in Mastercard on November 2, 2024 and sell it today you would earn a total of 4,440 from holding Mastercard or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Oxford Square Capital
Performance |
| Timeline |
| Mastercard |
| Oxford Square Capital |
Mastercard and Oxford Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Oxford Square
The main advantage of trading using opposite Mastercard and Oxford Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Oxford Square 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 Oxford Square will offset losses from the drop in Oxford Square's long position.| Mastercard vs. American Express | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial | Mastercard vs. Visa Class A |
| Oxford Square vs. Eagle Point Credit | Oxford Square vs. Cornerstone Strategic Return | Oxford Square vs. Cornerstone Strategic Value | Oxford Square vs. Guggenheim Strategic Opportunities |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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