Correlation Between Marqeta and Appian Corp
Can any of the company-specific risk be diversified away by investing in both Marqeta and Appian Corp 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 Marqeta and Appian Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marqeta and Appian Corp, you can compare the effects of market volatilities on Marqeta and Appian Corp 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 Marqeta with a short position of Appian Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marqeta and Appian Corp.
Diversification Opportunities for Marqeta and Appian Corp
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marqeta and Appian is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Appian Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appian Corp and Marqeta 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 Marqeta are associated (or correlated) with Appian Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appian Corp has no effect on the direction of Marqeta i.e., Marqeta and Appian Corp go up and down completely randomly.
Pair Corralation between Marqeta and Appian Corp
Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Appian Corp. In addition to that, Marqeta is 2.41 times more volatile than Appian Corp. It trades about -0.03 of its total potential returns per unit of risk. Appian Corp is currently generating about 0.13 per unit of volatility. If you would invest 3,179 in Appian Corp on August 26, 2024 and sell it today you would earn a total of 677.00 from holding Appian Corp or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marqeta vs. Appian Corp
Performance |
| Timeline |
| Marqeta |
| Appian Corp |
Marqeta and Appian Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marqeta and Appian Corp
The main advantage of trading using opposite Marqeta and Appian Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta position performs unexpectedly, Appian Corp 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 Appian Corp will offset losses from the drop in Appian Corp's long position.The idea behind Marqeta and Appian Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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