Correlation Between P10 and Mastercard

Can any of the company-specific risk be diversified away by investing in both P10 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 P10 and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between P10 Inc and Mastercard, you can compare the effects of market volatilities on P10 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 P10 with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of P10 and Mastercard.

Diversification Opportunities for P10 and Mastercard

0.73

Correlation Coefficient

P10  Mastercard

Poor diversification

The 3 months correlation between P10 and Mastercard is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding P10 Inc and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and P10 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 P10 Inc 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 P10 i.e., P10 and Mastercard go up and down completely randomly.

Pair Corralation between P10 and Mastercard

Allowing for the 90-day total investment horizon P10 Inc is expected to generate 1.41 times more return on investment than Mastercard. However, P10 is 1.41 times more volatile than Mastercard. It trades about 0.25 of its potential returns per unit of risk. Mastercard is currently generating about 0.34 per unit of risk. If you would invest  993.00  in P10 Inc on February 4, 2025 and sell it today you would earn a total of  164.00  from holding P10 Inc or generate 16.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

P10 Inc  vs.  Mastercard

P10 Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days P10 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mastercard

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mastercard has generated negative risk-adjusted returns adding no value to investors with long positions. 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 P10 and Mastercard

The main advantage of trading using opposite P10 and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if P10 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 P10 Inc 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .