Correlation Between Mastercard and Bowen Acquisition

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

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

Diversification Opportunities for Mastercard and Bowen Acquisition

-0.67

Correlation Coefficient

Mastercard  Bowen Acquisition

Excellent diversification

The 3 months correlation between Mastercard and Bowen is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp 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 Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Mastercard i.e., Mastercard and Bowen Acquisition go up and down completely randomly.

Pair Corralation between Mastercard and Bowen Acquisition

Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.1 times more return on investment than Bowen Acquisition. However, Mastercard is 9.68 times less risky than Bowen Acquisition. It trades about 0.03 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about 0.0 per unit of risk. If you would invest  52,816  in Mastercard on December 21, 2024 and sell it today you would earn a total of  822.00  from holding Mastercard or generate 1.56% return on investment over 90 days.

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

Mastercard  vs.  Bowen Acquisition Corp

Mastercard

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 2 (%) 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.

Bowen Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowen Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bowen Acquisition is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mastercard and Bowen Acquisition

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

The idea behind Mastercard and Bowen 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.