Correlation Between Mastercard and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both Mastercard and PIMCO RAFI 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 PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on Mastercard and PIMCO RAFI 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 PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and PIMCO RAFI.
Diversification Opportunities for Mastercard and PIMCO RAFI
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mastercard and PIMCO is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic 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 PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of Mastercard i.e., Mastercard and PIMCO RAFI go up and down completely randomly.
Pair Corralation between Mastercard and PIMCO RAFI
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.39 times more return on investment than PIMCO RAFI. However, Mastercard is 1.39 times more volatile than PIMCO RAFI Dynamic. It trades about 0.04 of its potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about 0.05 per unit of risk. If you would invest 47,475 in Mastercard on December 29, 2023 and sell it today you would earn a total of 320.00 from holding Mastercard or generate 0.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mastercard vs. PIMCO RAFI Dynamic
Performance |
Timeline |
Mastercard |
PIMCO RAFI Dynamic |
Mastercard and PIMCO RAFI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mastercard and PIMCO RAFI
The main advantage of trading using opposite Mastercard and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, PIMCO RAFI 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 PIMCO RAFI will offset losses from the drop in PIMCO RAFI's long position.Mastercard vs. Diamond Hill Investment | Mastercard vs. Nocturne Acquisition Corp | Mastercard vs. Mountain I Acquisition | Mastercard vs. Mountain Crest Acquisition |
PIMCO RAFI vs. Home Depot | PIMCO RAFI vs. Barloworld Ltd ADR | PIMCO RAFI vs. Morningstar Unconstrained Allocation | PIMCO RAFI vs. High Yield Municipal Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Stocks Directory Find actively traded stocks across global markets | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
CEOs Directory Screen CEOs from public companies around the world |