Correlation Between Marqeta and SOS
Can any of the company-specific risk be diversified away by investing in both Marqeta and SOS 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 SOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marqeta and SOS Limited, you can compare the effects of market volatilities on Marqeta and SOS 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 SOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marqeta and SOS.
Diversification Opportunities for Marqeta and SOS
Modest diversification
The 3 months correlation between Marqeta and SOS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and SOS Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOS Limited 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 SOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOS Limited has no effect on the direction of Marqeta i.e., Marqeta and SOS go up and down completely randomly.
Pair Corralation between Marqeta and SOS
Allowing for the 90-day total investment horizon Marqeta is expected to generate 1.11 times more return on investment than SOS. However, Marqeta is 1.11 times more volatile than SOS Limited. It trades about -0.05 of its potential returns per unit of risk. SOS Limited is currently generating about -0.19 per unit of risk. If you would invest 530.00 in Marqeta on August 26, 2024 and sell it today you would lose (125.00) from holding Marqeta or give up 23.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marqeta vs. SOS Limited
Performance |
| Timeline |
| Marqeta |
| SOS Limited |
Marqeta and SOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marqeta and SOS
The main advantage of trading using opposite Marqeta and SOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta position performs unexpectedly, SOS 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 SOS will offset losses from the drop in SOS's long position.The idea behind Marqeta and SOS Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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