Correlation Between CNVISION MEDIA and Mastercard

Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA and Mastercard 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 CNVISION MEDIA and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CNVISION MEDIA and Mastercard, you can compare the effects of market volatilities on CNVISION MEDIA and Mastercard 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 CNVISION MEDIA with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and Mastercard.

Diversification Opportunities for CNVISION MEDIA and Mastercard

-0.03

Correlation Coefficient

CNVISION MEDIA  Mastercard

Good diversification

The 3 months correlation between CNVISION and Mastercard is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and CNVISION MEDIA 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 CNVISION MEDIA are associated (or correlated) with Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and Mastercard go up and down completely randomly.

Pair Corralation between CNVISION MEDIA and Mastercard

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 3.9 times less return on investment than Mastercard. In addition to that, CNVISION MEDIA is 2.64 times more volatile than Mastercard. It trades about 0.01 of its total potential returns per unit of risk. Mastercard is currently generating about 0.08 per unit of volatility. If you would invest  33,699  in Mastercard on October 5, 2024 and sell it today you would earn a total of  17,251  from holding Mastercard or generate 51.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CNVISION MEDIA  vs.  Mastercard

CNVISION MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNVISION MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Mastercard

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Mastercard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Mastercard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CNVISION MEDIA and Mastercard

The main advantage of trading using opposite CNVISION MEDIA and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.

The idea behind CNVISION MEDIA and Mastercard 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.