Correlation Between Cardano and Marqeta
Can any of the company-specific risk be diversified away by investing in both Cardano and Marqeta 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 Cardano and Marqeta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Marqeta, you can compare the effects of market volatilities on Cardano and Marqeta 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 Cardano with a short position of Marqeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Marqeta.
Diversification Opportunities for Cardano and Marqeta
Pay attention - limited upside
The 3 months correlation between Cardano and Marqeta is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Cardano 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 Cardano are associated (or correlated) with Marqeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marqeta has no effect on the direction of Cardano i.e., Cardano and Marqeta go up and down completely randomly.
Pair Corralation between Cardano and Marqeta
Assuming the 90 days trading horizon Cardano is expected to under-perform the Marqeta. In addition to that, Cardano is 2.53 times more volatile than Marqeta. It trades about -0.12 of its total potential returns per unit of risk. Marqeta is currently generating about 0.19 per unit of volatility. If you would invest 373.00 in Marqeta on November 2, 2024 and sell it today you would earn a total of 23.00 from holding Marqeta or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Cardano vs. Marqeta
Performance |
| Timeline |
| Cardano |
| Marqeta |
Cardano and Marqeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Marqeta
The main advantage of trading using opposite Cardano and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Marqeta 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 Marqeta will offset losses from the drop in Marqeta's long position.The idea behind Cardano and Marqeta 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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