Correlation Between Western Union and Mastercard

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

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

Diversification Opportunities for Western Union and Mastercard

0.41

Correlation Coefficient

Western Union  Mastercard

Very weak diversification

The 3 months correlation between Western and Mastercard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and Western Union 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 Western Union 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 Western Union i.e., Western Union and Mastercard go up and down completely randomly.

Pair Corralation between Western Union and Mastercard

Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Mastercard. In addition to that, Western Union is 1.31 times more volatile than Mastercard. It trades about -0.14 of its total potential returns per unit of risk. Mastercard is currently generating about 0.03 per unit of volatility. If you would invest  55,823  in Mastercard on May 6, 2025 and sell it today you would earn a total of  1,158  from holding Mastercard or generate 2.07% return on investment over 90 days.

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

Western Union Co  vs.  Mastercard

Western Union

Risk-Adjusted Performance

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mastercard

Risk-Adjusted Performance

Very 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.

Pair Trading with Western Union and Mastercard

The main advantage of trading using opposite Western Union and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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 Western Union 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.