Correlation Between Ready Capital and Mastercard
Can any of the company-specific risk be diversified away by investing in both Ready Capital 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 Ready Capital and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ready Capital Corp and Mastercard, you can compare the effects of market volatilities on Ready Capital 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 Ready Capital with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and Mastercard.
Diversification Opportunities for Ready Capital and Mastercard
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ready and Mastercard is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital Corp and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and Ready Capital 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 Ready Capital Corp 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 Ready Capital i.e., Ready Capital and Mastercard go up and down completely randomly.
Pair Corralation between Ready Capital and Mastercard
Allowing for the 90-day total investment horizon Ready Capital Corp is expected to under-perform the Mastercard. In addition to that, Ready Capital is 1.86 times more volatile than Mastercard. It trades about -0.03 of its total potential returns per unit of risk. Mastercard is currently generating about 0.1 per unit of volatility. If you would invest 40,666 in Mastercard on August 24, 2024 and sell it today you would earn a total of 11,256 from holding Mastercard or generate 27.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ready Capital Corp vs. Mastercard
Performance |
| Timeline |
| Ready Capital Corp |
| Mastercard |
Ready Capital and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and Mastercard
The main advantage of trading using opposite Ready Capital and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital 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.| Ready Capital vs. Ellington Residential Mortgage | Ready Capital vs. Ellington Financial | Ready Capital vs. Dynex Capital | Ready Capital vs. Orchid Island Capital |
| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |