Correlation Between Mastercard and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both Mastercard and BankInvest Optima 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 BankInvest Optima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and BankInvest Optima 55, you can compare the effects of market volatilities on Mastercard and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and BankInvest Optima.
Diversification Opportunities for Mastercard and BankInvest Optima
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mastercard and BankInvest is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and BankInvest Optima 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Mastercard i.e., Mastercard and BankInvest Optima go up and down completely randomly.
Pair Corralation between Mastercard and BankInvest Optima
Allowing for the 90-day total investment horizon Mastercard is expected to under-perform the BankInvest Optima. In addition to that, Mastercard is 2.04 times more volatile than BankInvest Optima 55. It trades about -0.16 of its total potential returns per unit of risk. BankInvest Optima 55 is currently generating about -0.17 per unit of volatility. If you would invest 11,145 in BankInvest Optima 55 on January 26, 2024 and sell it today you would lose (150.00) from holding BankInvest Optima 55 or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Mastercard vs. BankInvest Optima 55
Performance |
| Timeline |
| Mastercard |
| BankInvest Optima |
Mastercard and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and BankInvest Optima
The main advantage of trading using opposite Mastercard and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.| Mastercard vs. Senmiao Technology | Mastercard vs. X Financial Class | Mastercard vs. Yirendai | Mastercard vs. Qudian Inc |
| BankInvest Optima vs. Novo Nordisk AS | BankInvest Optima vs. Nordea Bank Abp | BankInvest Optima vs. DSV Panalpina AS | BankInvest Optima vs. AP Mller |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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