Correlation Between Box and Marqeta

Can any of the company-specific risk be diversified away by investing in both Box 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 Box and Marqeta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Box Inc and Marqeta, you can compare the effects of market volatilities on Box 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 Box with a short position of Marqeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box and Marqeta.

Diversification Opportunities for Box and Marqeta

-0.72

Correlation Coefficient

Box  Marqeta

Pay attention - limited upside

The 3 months correlation between Box and Marqeta is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Box 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 Box Inc 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 Box i.e., Box and Marqeta go up and down completely randomly.

Pair Corralation between Box and Marqeta

Considering the 90-day investment horizon Box Inc is expected to generate 0.48 times more return on investment than Marqeta. However, Box Inc is 2.09 times less risky than Marqeta. It trades about 0.02 of its potential returns per unit of risk. Marqeta is currently generating about -0.01 per unit of risk. If you would invest  3,128  in Box Inc on September 3, 2024 and sell it today you would earn a total of  381.00  from holding Box Inc or generate 12.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Box Inc  vs.  Marqeta

Box Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Box Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Box may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Marqeta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marqeta has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Box and Marqeta

The main advantage of trading using opposite Box and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Box 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 Box Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.