Correlation Between Unifin Financiera and Mastercard Incorporated

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

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

Diversification Opportunities for Unifin Financiera and Mastercard Incorporated

0.0

Correlation Coefficient

Unifin Financiera  Mastercard Incorporated

Pay attention - limited upside

The 3 months correlation between Unifin and Mastercard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Unifin Financiera S and Mastercard Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard Incorporated and Unifin Financiera 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 Unifin Financiera S are associated (or correlated) with Mastercard Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard Incorporated has no effect on the direction of Unifin Financiera i.e., Unifin Financiera and Mastercard Incorporated go up and down completely randomly.

Pair Corralation between Unifin Financiera and Mastercard Incorporated

If you would invest  1,200  in Unifin Financiera S on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Unifin Financiera S or generate 0.0% return on investment over 90 days.

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

Unifin Financiera S  vs.  Mastercard Incorporated

Unifin Financiera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unifin Financiera S has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Unifin Financiera is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Mastercard Incorporated

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Mastercard Incorporated may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Unifin Financiera and Mastercard Incorporated

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

The idea behind Unifin Financiera S and Mastercard Incorporated 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.