Correlation Between Mastercard and Akoustis Technologies

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Can any of the company-specific risk be diversified away by investing in both Mastercard and Akoustis Technologies 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 Akoustis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Akoustis Technologies, you can compare the effects of market volatilities on Mastercard and Akoustis Technologies 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 Akoustis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Akoustis Technologies.

Diversification Opportunities for Mastercard and Akoustis Technologies

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Mastercard and Akoustis is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Akoustis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akoustis Technologies 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 Akoustis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akoustis Technologies has no effect on the direction of Mastercard i.e., Mastercard and Akoustis Technologies go up and down completely randomly.

Pair Corralation between Mastercard and Akoustis Technologies

Allowing for the 90-day total investment horizon Mastercard is expected to generate 3.84 times less return on investment than Akoustis Technologies. But when comparing it to its historical volatility, Mastercard is 5.62 times less risky than Akoustis Technologies. It trades about 0.14 of its potential returns per unit of risk. Akoustis Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  55.00  in Akoustis Technologies on December 3, 2023 and sell it today you would earn a total of  5.00  from holding Akoustis Technologies or generate 9.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mastercard  vs.  Akoustis Technologies

 Performance 
       Timeline  
Mastercard 

Risk-Adjusted Performance

21 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Mastercard sustained solid returns over the last few months and may actually be approaching a breakup point.
Akoustis Technologies 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Akoustis Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Akoustis Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mastercard and Akoustis Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mastercard and Akoustis Technologies

The main advantage of trading using opposite Mastercard and Akoustis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Akoustis Technologies 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 Akoustis Technologies will offset losses from the drop in Akoustis Technologies' long position.
The idea behind Mastercard and Akoustis Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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