Correlation Between Mastercard and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Mastercard and Meta Platforms 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 Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Meta Platforms, you can compare the effects of market volatilities on Mastercard and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Meta Platforms.
Diversification Opportunities for Mastercard and Meta Platforms
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mastercard and Meta is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Mastercard i.e., Mastercard and Meta Platforms go up and down completely randomly.
Pair Corralation between Mastercard and Meta Platforms
If you would invest 37,268 in Mastercard on December 29, 2023 and sell it today you would earn a total of 10,527 from holding Mastercard or generate 28.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 0.35% |
Values | Daily Returns |
Mastercard vs. Meta Platforms
Performance |
Timeline |
Mastercard |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Mastercard and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mastercard and Meta Platforms
The main advantage of trading using opposite Mastercard and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.Mastercard vs. Diamond Hill Investment | Mastercard vs. Nocturne Acquisition Corp | Mastercard vs. Mountain I Acquisition | Mastercard vs. Mountain Crest Acquisition |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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