Correlation Between Mastercard and Runway Growth
Can any of the company-specific risk be diversified away by investing in both Mastercard and Runway Growth 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 Runway Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Runway Growth Finance, you can compare the effects of market volatilities on Mastercard and Runway Growth 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 Runway Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Runway Growth.
Diversification Opportunities for Mastercard and Runway Growth
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mastercard and Runway is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Runway Growth Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runway Growth Finance 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 Runway Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runway Growth Finance has no effect on the direction of Mastercard i.e., Mastercard and Runway Growth go up and down completely randomly.
Pair Corralation between Mastercard and Runway Growth
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.38 times more return on investment than Runway Growth. However, Mastercard is 1.38 times more volatile than Runway Growth Finance. It trades about 0.09 of its potential returns per unit of risk. Runway Growth Finance is currently generating about 0.04 per unit of risk. If you would invest 54,764 in Mastercard on November 27, 2024 and sell it today you would earn a total of 987.00 from holding Mastercard or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Runway Growth Finance
Performance |
| Timeline |
| Mastercard |
| Runway Growth Finance |
Mastercard and Runway Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Runway Growth
The main advantage of trading using opposite Mastercard and Runway Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Runway Growth 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 Runway Growth will offset losses from the drop in Runway Growth's long position.| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
| Runway Growth vs. Barings BDC | Runway Growth vs. OneMain Holdings | Runway Growth vs. Navient Corp | Runway Growth vs. Federal Agricultural Mortgage |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |