Correlation Between AES and Mastercard
Can any of the company-specific risk be diversified away by investing in both AES 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 AES and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The AES and Mastercard, you can compare the effects of market volatilities on AES 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 AES with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Mastercard.
Diversification Opportunities for AES and Mastercard
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AES and Mastercard is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and AES 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 The AES 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 AES i.e., AES and Mastercard go up and down completely randomly.
Pair Corralation between AES and Mastercard
Considering the 90-day investment horizon The AES is expected to generate 2.57 times more return on investment than Mastercard. However, AES is 2.57 times more volatile than Mastercard. It trades about 0.13 of its potential returns per unit of risk. Mastercard is currently generating about 0.02 per unit of risk. If you would invest 1,037 in The AES on June 5, 2025 and sell it today you would earn a total of 286.00 from holding The AES or generate 27.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The AES vs. Mastercard
Performance |
| Timeline |
| AES |
| Mastercard |
AES and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES and Mastercard
The main advantage of trading using opposite AES and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES 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 The AES 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.| Mastercard vs. American Express | Mastercard vs. Salesforce | Mastercard vs. NVIDIA | Mastercard vs. SHOPIFY INC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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