Correlation Between Mastercard and Pintec Technology

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

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

Diversification Opportunities for Mastercard and Pintec Technology

-0.57

Correlation Coefficient

Mastercard  Pintec Technology

Excellent diversification

The 3 months correlation between Mastercard and Pintec is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology 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 Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of Mastercard i.e., Mastercard and Pintec Technology go up and down completely randomly.

Pair Corralation between Mastercard and Pintec Technology

Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.14 times more return on investment than Pintec Technology. However, Mastercard is 7.25 times less risky than Pintec Technology. It trades about 0.12 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.0 per unit of risk. If you would invest  49,270  in Mastercard on July 15, 2024 and sell it today you would earn a total of  956.00  from holding Mastercard or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mastercard  vs.  Pintec Technology Holdings

Mastercard

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 13 (%) 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 November 2024.

Pintec Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pintec Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mastercard and Pintec Technology

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

The idea behind Mastercard and Pintec Technology Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.