Correlation Between Mastercard and Dime Community
Can any of the company-specific risk be diversified away by investing in both Mastercard and Dime Community 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 Dime Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Dime Community Bancshares, you can compare the effects of market volatilities on Mastercard and Dime Community 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 Dime Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Dime Community.
Diversification Opportunities for Mastercard and Dime Community
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mastercard and Dime is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Dime Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dime Community Bancshares 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 Dime Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dime Community Bancshares has no effect on the direction of Mastercard i.e., Mastercard and Dime Community go up and down completely randomly.
Pair Corralation between Mastercard and Dime Community
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.36 times more return on investment than Dime Community. However, Mastercard is 2.81 times less risky than Dime Community. It trades about 0.09 of its potential returns per unit of risk. Dime Community Bancshares is currently generating about 0.02 per unit of risk. If you would invest 37,764 in Mastercard on January 26, 2024 and sell it today you would earn a total of 8,486 from holding Mastercard or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Mastercard vs. Dime Community Bancshares
Performance |
| Timeline |
| Mastercard |
| Dime Community Bancshares |
Mastercard and Dime Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Dime Community
The main advantage of trading using opposite Mastercard and Dime Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Dime Community 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 Dime Community will offset losses from the drop in Dime Community's long position.| Mastercard vs. Senmiao Technology | Mastercard vs. X Financial Class | Mastercard vs. Yirendai | Mastercard vs. Qudian Inc |
| Dime Community vs. Peapack Gladstone Financial | Dime Community vs. Northfield Bancorp | Dime Community vs. Great Southern Bancorp | Dime Community vs. Heritage 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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