Correlation Between Mastercard and KYN Capital

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

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

Diversification Opportunities for Mastercard and KYN Capital

0.13

Correlation Coefficient

Mastercard  KYN Capital

Average diversification

The 3 months correlation between Mastercard and KYN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group 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 KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Mastercard i.e., Mastercard and KYN Capital go up and down completely randomly.

Pair Corralation between Mastercard and KYN Capital

Allowing for the 90-day total investment horizon Mastercard is expected to generate 10.96 times less return on investment than KYN Capital. But when comparing it to its historical volatility, Mastercard is 12.82 times less risky than KYN Capital. It trades about 0.09 of its potential returns per unit of risk. KYN Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.05  in KYN Capital Group on December 28, 2024 and sell it today you would earn a total of  0.00  from holding KYN Capital Group or generate 0.0% return on investment over 90 days.

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

Mastercard  vs.  KYN Capital Group

Mastercard

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mastercard may actually be approaching a critical reversion point that can send shares even higher in April 2025.

KYN Capital Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KYN Capital Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, KYN Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mastercard and KYN Capital

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

The idea behind Mastercard and KYN Capital Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.