Correlation Between Mastercard and Danish Aerospace
Can any of the company-specific risk be diversified away by investing in both Mastercard and Danish Aerospace 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 Danish Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Danish Aerospace, you can compare the effects of market volatilities on Mastercard and Danish Aerospace 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 Danish Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Danish Aerospace.
Diversification Opportunities for Mastercard and Danish Aerospace
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastercard and Danish is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Danish Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danish Aerospace 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 Danish Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danish Aerospace has no effect on the direction of Mastercard i.e., Mastercard and Danish Aerospace go up and down completely randomly.
Pair Corralation between Mastercard and Danish Aerospace
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.29 times more return on investment than Danish Aerospace. However, Mastercard is 3.47 times less risky than Danish Aerospace. It trades about 0.04 of its potential returns per unit of risk. Danish Aerospace is currently generating about 0.01 per unit of risk. If you would invest 35,898 in Mastercard on January 19, 2024 and sell it today you would earn a total of 10,187 from holding Mastercard or generate 28.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mastercard vs. Danish Aerospace
Performance |
| Timeline |
| Mastercard |
| Danish Aerospace |
Mastercard and Danish Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Danish Aerospace
The main advantage of trading using opposite Mastercard and Danish Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Danish Aerospace 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 Danish Aerospace will offset losses from the drop in Danish Aerospace's long position.| Mastercard vs. American Express | Mastercard vs. Capital One Financial | Mastercard vs. Upstart HoldingsInc | Mastercard vs. Ally Financial |
| Danish Aerospace vs. BioPorto | Danish Aerospace vs. cBrain AS | Danish Aerospace vs. Orphazyme AS | Danish Aerospace vs. North Media AS |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |