Correlation Between Mastercard and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both Mastercard and Sydbank AS 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 Sydbank AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Sydbank AS, you can compare the effects of market volatilities on Mastercard and Sydbank AS 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 Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Sydbank AS.
Diversification Opportunities for Mastercard and Sydbank AS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mastercard and Sydbank is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS 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 Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of Mastercard i.e., Mastercard and Sydbank AS go up and down completely randomly.
Pair Corralation between Mastercard and Sydbank AS
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.28 times less return on investment than Sydbank AS. But when comparing it to its historical volatility, Mastercard is 1.45 times less risky than Sydbank AS. It trades about 0.09 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 27,882 in Sydbank AS on January 26, 2024 and sell it today you would earn a total of 7,878 from holding Sydbank AS or generate 28.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Mastercard vs. Sydbank AS
Performance |
| Timeline |
| Mastercard |
| Sydbank AS |
Mastercard and Sydbank AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Sydbank AS
The main advantage of trading using opposite Mastercard and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Sydbank AS 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 Sydbank AS will offset losses from the drop in Sydbank AS's long position.| Mastercard vs. Senmiao Technology | Mastercard vs. X Financial Class | Mastercard vs. Yirendai | Mastercard vs. Qudian Inc |
| Sydbank AS vs. Jyske Bank AS | Sydbank AS vs. Tryg AS | Sydbank AS vs. FLSmidth Co | Sydbank AS vs. Nordea Bank Abp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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