Correlation Between Mastercard and Intrusion

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

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

Diversification Opportunities for Mastercard and Intrusion

-0.1

Correlation Coefficient

Mastercard  Intrusion

Good diversification

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

Pair Corralation between Mastercard and Intrusion

Allowing for the 90-day total investment horizon Mastercard is expected to under-perform the Intrusion. But the stock apears to be less risky and, when comparing its historical volatility, Mastercard is 88.76 times less risky than Intrusion. The stock trades about -0.03 of its potential returns per unit of risk. The Intrusion is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Intrusion on October 24, 2024 and sell it today you would earn a total of  195.00  from holding Intrusion or generate 541.67% return on investment over 90 days.

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

Mastercard  vs.  Intrusion

Mastercard

Risk-Adjusted Performance

3 of 100

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.

Intrusion

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intrusion are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Intrusion showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mastercard and Intrusion

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

The idea behind Mastercard and Intrusion 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.