Correlation Between Mastercard and Pintec Technology
Can any of the company-specific risk be diversified away by investing in both Mastercard and Pintec Technology 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 Pintec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Pintec Technology Holdings, you can compare the effects of market volatilities on Mastercard and Pintec Technology 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 Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Pintec Technology.
Diversification Opportunities for Mastercard and Pintec Technology
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mastercard and Pintec is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology 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 Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of Mastercard i.e., Mastercard and Pintec Technology go up and down completely randomly.
Pair Corralation between Mastercard and Pintec Technology
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.38 times more return on investment than Pintec Technology. However, Mastercard is 2.61 times less risky than Pintec Technology. It trades about 0.1 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about -0.01 per unit of risk. If you would invest 41,198 in Mastercard on August 27, 2024 and sell it today you would earn a total of 10,888 from holding Mastercard or generate 26.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Pintec Technology Holdings
Performance |
| Timeline |
| Mastercard |
| Pintec Technology |
Mastercard and Pintec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Pintec Technology
The main advantage of trading using opposite Mastercard and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Pintec Technology 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 Pintec Technology will offset losses from the drop in Pintec Technology's long position.| Mastercard vs. American Express | Mastercard vs. Morningstar Unconstrained Allocation | Mastercard vs. Sitka Gold Corp | Mastercard vs. MSCI ACWI exAUCONSUMER |
| Pintec Technology vs. SLM Corp | Pintec Technology vs. Orix Corp Ads | Pintec Technology vs. FirstCash | Pintec Technology vs. Medallion Financial Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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