Correlation Between Mastercard and 360 Finance
Can any of the company-specific risk be diversified away by investing in both Mastercard and 360 Finance 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 360 Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and 360 Finance, you can compare the effects of market volatilities on Mastercard and 360 Finance 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 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and 360 Finance.
Diversification Opportunities for Mastercard and 360 Finance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mastercard and 360 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance 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 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of Mastercard i.e., Mastercard and 360 Finance go up and down completely randomly.
Pair Corralation between Mastercard and 360 Finance
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.29 times more return on investment than 360 Finance. However, Mastercard is 3.45 times less risky than 360 Finance. It trades about 0.1 of its potential returns per unit of risk. 360 Finance is currently generating about -0.06 per unit of risk. If you would invest 56,601 in Mastercard on December 1, 2024 and sell it today you would earn a total of 1,030 from holding Mastercard or generate 1.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mastercard vs. 360 Finance
Performance |
Timeline |
Mastercard |
360 Finance |
Mastercard and 360 Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mastercard and 360 Finance
The main advantage of trading using opposite Mastercard and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
360 Finance vs. National CineMedia | 360 Finance vs. BOS Better Online | 360 Finance vs. Best Buy Co | 360 Finance vs. Group 1 Automotive |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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