Correlation Between Mint and Mastercard
Can any of the company-specific risk be diversified away by investing in both Mint and Mastercard 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 Mint and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mint and Mastercard, you can compare the effects of market volatilities on Mint and Mastercard 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 Mint with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mint and Mastercard.
Diversification Opportunities for Mint and Mastercard
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mint and Mastercard is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Mint and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and Mint 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 The Mint are associated (or correlated) with Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Mint i.e., Mint and Mastercard go up and down completely randomly.
Pair Corralation between Mint and Mastercard
Assuming the 90 days horizon The Mint is expected to generate 213.02 times more return on investment than Mastercard. However, Mint is 213.02 times more volatile than Mastercard. It trades about 0.22 of its potential returns per unit of risk. Mastercard is currently generating about 0.16 per unit of risk. If you would invest 1.30 in The Mint on November 2, 2024 and sell it today you would lose (0.30) from holding The Mint or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.26% |
| Values | Daily Returns |
The Mint vs. Mastercard
Performance |
| Timeline |
| Mint |
| Mastercard |
Mint and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mint and Mastercard
The main advantage of trading using opposite Mint and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mint position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.The idea behind The Mint and Mastercard pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mastercard vs. American Express | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial | Mastercard vs. Visa Class A |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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