Correlation Between Mastercard and PIMCO 1
Can any of the company-specific risk be diversified away by investing in both Mastercard and PIMCO 1 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 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and PIMCO 1 5 Year, you can compare the effects of market volatilities on Mastercard and PIMCO 1 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 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and PIMCO 1.
Diversification Opportunities for Mastercard and PIMCO 1
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mastercard and PIMCO is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and PIMCO 1-5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO 1-5 Year 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 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO 1-5 Year has no effect on the direction of Mastercard i.e., Mastercard and PIMCO 1 go up and down completely randomly.
Pair Corralation between Mastercard and PIMCO 1
Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.13 times less return on investment than PIMCO 1. In addition to that, Mastercard is 7.01 times more volatile than PIMCO 1 5 Year. It trades about 0.04 of its total potential returns per unit of risk. PIMCO 1 5 Year is currently generating about 0.28 per unit of volatility. If you would invest 5,116 in PIMCO 1 5 Year on December 30, 2023 and sell it today you would earn a total of 37.00 from holding PIMCO 1 5 Year or generate 0.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mastercard vs. PIMCO 1-5 Year
Performance |
Timeline |
Mastercard |
PIMCO 1-5 Year |
Mastercard and PIMCO 1 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mastercard and PIMCO 1
The main advantage of trading using opposite Mastercard and PIMCO 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, PIMCO 1 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 1 will offset losses from the drop in PIMCO 1's long position.Mastercard vs. MDB Capital Holdings | Mastercard vs. Orix Corp Ads | Mastercard vs. LendingClub Corp | Mastercard vs. Lexinfintech Holdings |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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