Correlation Between Marqeta and Gen Digital
Can any of the company-specific risk be diversified away by investing in both Marqeta and Gen Digital 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 Gen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marqeta and Gen Digital, you can compare the effects of market volatilities on Marqeta and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marqeta and Gen Digital.
Diversification Opportunities for Marqeta and Gen Digital
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marqeta and Gen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of Marqeta i.e., Marqeta and Gen Digital go up and down completely randomly.
Pair Corralation between Marqeta and Gen Digital
Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Gen Digital. In addition to that, Marqeta is 4.27 times more volatile than Gen Digital. It trades about -0.01 of its total potential returns per unit of risk. Gen Digital is currently generating about 0.18 per unit of volatility. If you would invest 2,663 in Gen Digital on August 26, 2024 and sell it today you would earn a total of 356.00 from holding Gen Digital or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marqeta vs. Gen Digital
Performance |
| Timeline |
| Marqeta |
| Gen Digital |
Marqeta and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marqeta and Gen Digital
The main advantage of trading using opposite Marqeta and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.The idea behind Marqeta and Gen Digital 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.| Gen Digital vs. GigaCloud Technology Class | Gen Digital vs. Arqit Quantum | Gen Digital vs. Telos Corp | Gen Digital vs. Cemtrex |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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