Correlation Between Mastercard and Sezzle

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

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

Diversification Opportunities for Mastercard and Sezzle

0.66

Correlation Coefficient

Mastercard  Sezzle

Poor diversification

The 3 months correlation between Mastercard and Sezzle is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Sezzle Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Inc 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 Sezzle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Inc has no effect on the direction of Mastercard i.e., Mastercard and Sezzle go up and down completely randomly.

Pair Corralation between Mastercard and Sezzle

Allowing for the 90-day total investment horizon Mastercard is expected to generate 336.91 times less return on investment than Sezzle. But when comparing it to its historical volatility, Mastercard is 162.83 times less risky than Sezzle. It trades about 0.1 of its potential returns per unit of risk. Sezzle Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Sezzle Inc on September 14, 2024 and sell it today you would earn a total of  699.00  from holding Sezzle Inc or generate 1997.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	10.94%
Values	Daily Returns

Mastercard  vs.  Sezzle Inc

Mastercard

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Mastercard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sezzle Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sezzle Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sezzle is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Mastercard and Sezzle

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

The idea behind Mastercard and Sezzle Inc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.