Correlation Between Mastercard and AlphaVest Acquisition

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

By analyzing existing cross correlation between Mastercard and AlphaVest Acquisition Corp, you can compare the effects of market volatilities on Mastercard and AlphaVest Acquisition 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 AlphaVest Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and AlphaVest Acquisition.

Diversification Opportunities for Mastercard and AlphaVest Acquisition

0.69

Correlation Coefficient

Mastercard  AlphaVest Acquisition

Poor diversification

The 3 months correlation between Mastercard and AlphaVest is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition 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 AlphaVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaVest Acquisition has no effect on the direction of Mastercard i.e., Mastercard and AlphaVest Acquisition go up and down completely randomly.

Pair Corralation between Mastercard and AlphaVest Acquisition

Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.97 times more return on investment than AlphaVest Acquisition. However, Mastercard is 1.97 times more volatile than AlphaVest Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. AlphaVest Acquisition Corp is currently generating about 0.0 per unit of risk. If you would invest  52,476  in Mastercard on December 30, 2024 and sell it today you would earn a total of  1,585  from holding Mastercard or generate 3.02% return on investment over 90 days.

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

Mastercard  vs.  AlphaVest Acquisition Corp

Mastercard

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mastercard is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

AlphaVest Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days AlphaVest Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AlphaVest Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mastercard and AlphaVest Acquisition

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

The idea behind Mastercard and AlphaVest Acquisition Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.