Correlation Between Bandwidth and Marqeta
Can any of the company-specific risk be diversified away by investing in both Bandwidth 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 Bandwidth and Marqeta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bandwidth and Marqeta, you can compare the effects of market volatilities on Bandwidth 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 Bandwidth with a short position of Marqeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bandwidth and Marqeta.
Diversification Opportunities for Bandwidth and Marqeta
Excellent diversification
The 3 months correlation between Bandwidth and Marqeta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bandwidth and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Bandwidth 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 Bandwidth 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 Bandwidth i.e., Bandwidth and Marqeta go up and down completely randomly.
Pair Corralation between Bandwidth and Marqeta
Given the investment horizon of 90 days Bandwidth is expected to generate 1.26 times less return on investment than Marqeta. In addition to that, Bandwidth is 1.65 times more volatile than Marqeta. It trades about 0.04 of its total potential returns per unit of risk. Marqeta is currently generating about 0.08 per unit of volatility. If you would invest 391.00 in Marqeta on September 14, 2024 and sell it today you would earn a total of 12.00 from holding Marqeta or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bandwidth vs. Marqeta
Performance |
| Timeline |
| Bandwidth |
| Marqeta |
Bandwidth and Marqeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bandwidth and Marqeta
The main advantage of trading using opposite Bandwidth and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bandwidth 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.| Bandwidth vs. DigitalOcean Holdings | Bandwidth vs. Adyen NV | Bandwidth vs. Okta Inc | Bandwidth vs. Confluent |
| Marqeta vs. Evertec | Marqeta vs. Consensus Cloud Solutions | Marqeta vs. Global Blue Group | Marqeta vs. NetScout Systems |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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