Correlation Between Mastercard Incorporated and ONEOK
Can any of the company-specific risk be diversified away by investing in both Mastercard Incorporated and ONEOK 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 Incorporated and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard Incorporated and ONEOK Inc, you can compare the effects of market volatilities on Mastercard Incorporated and ONEOK 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 Incorporated with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard Incorporated and ONEOK.
Diversification Opportunities for Mastercard Incorporated and ONEOK
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mastercard and ONEOK is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard Incorporated and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Mastercard Incorporated 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 Incorporated are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Mastercard Incorporated i.e., Mastercard Incorporated and ONEOK go up and down completely randomly.
Pair Corralation between Mastercard Incorporated and ONEOK
Assuming the 90 days trading horizon Mastercard Incorporated is expected to generate 1.43 times less return on investment than ONEOK. But when comparing it to its historical volatility, Mastercard Incorporated is 1.7 times less risky than ONEOK. It trades about 0.18 of its potential returns per unit of risk. ONEOK Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 20,958 in ONEOK Inc on September 1, 2024 and sell it today you would earn a total of 11,770 from holding ONEOK Inc or generate 56.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.45% |
| Values | Daily Returns |
Mastercard Incorporated vs. ONEOK Inc
Performance |
| Timeline |
| Mastercard Incorporated |
| ONEOK Inc |
Mastercard Incorporated and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard Incorporated and ONEOK
The main advantage of trading using opposite Mastercard Incorporated and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard Incorporated position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| Mastercard Incorporated vs. Micron Technology | Mastercard Incorporated vs. Take Two Interactive Software | Mastercard Incorporated vs. Marfrig Global Foods | Mastercard Incorporated vs. Metalurgica Gerdau SA |
| ONEOK vs. Paycom Software | ONEOK vs. Micron Technology | ONEOK vs. Charter Communications | ONEOK vs. Beyond Meat |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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