Correlation Between Mastercard and SuRo Capital

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

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

Diversification Opportunities for Mastercard and SuRo Capital

0.06

Correlation Coefficient

Mastercard  SuRo Capital

Significant diversification

The 3 months correlation between Mastercard and SuRo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Mastercard i.e., Mastercard and SuRo Capital go up and down completely randomly.

Pair Corralation between Mastercard and SuRo Capital

Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.09 times less return on investment than SuRo Capital. But when comparing it to its historical volatility, Mastercard is 4.29 times less risky than SuRo Capital. It trades about 0.03 of its potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  606.00  in SuRo Capital Corp on December 26, 2024 and sell it today you would lose (31.00) from holding SuRo Capital Corp or give up 5.12% of portfolio value over 90 days.

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

Mastercard  vs.  SuRo Capital 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.

SuRo Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SuRo Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SuRo Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mastercard and SuRo Capital

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

The idea behind Mastercard and SuRo Capital 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.