Correlation Between Marui Group and Mastercard

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

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

Diversification Opportunities for Marui Group and Mastercard

0.01

Correlation Coefficient

Marui Group  Mastercard

Significant diversification

The 3 months correlation between Marui and Mastercard is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marui Group Co and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and Marui Group 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 Marui Group Co are associated (or correlated) with Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Marui Group i.e., Marui Group and Mastercard go up and down completely randomly.

Pair Corralation between Marui Group and Mastercard

Assuming the 90 days horizon Marui Group is expected to generate 1.17 times less return on investment than Mastercard. In addition to that, Marui Group is 3.4 times more volatile than Mastercard. It trades about 0.02 of its total potential returns per unit of risk. Mastercard is currently generating about 0.09 per unit of volatility. If you would invest  34,053  in Mastercard on September 28, 2024 and sell it today you would earn a total of  19,167  from holding Mastercard or generate 56.29% return on investment over 90 days.

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

Marui Group Co  vs.  Mastercard

Marui Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marui Group Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marui Group showed solid returns over the last few months and may actually be approaching a breakup point.

Mastercard

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 10 (%) 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 January 2025.

Pair Trading with Marui Group and Mastercard

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

The idea behind Marui Group Co and Mastercard 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.