Correlation Between GigaCloud Technology and Marqeta

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

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

Diversification Opportunities for GigaCloud Technology and Marqeta

-0.02

Correlation Coefficient

GigaCloud Technology  Marqeta

Good diversification

The 3 months correlation between GigaCloud and Marqeta is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and GigaCloud Technology 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 GigaCloud Technology Class 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 GigaCloud Technology i.e., GigaCloud Technology and Marqeta go up and down completely randomly.

Pair Corralation between GigaCloud Technology and Marqeta

Considering the 90-day investment horizon GigaCloud Technology Class is expected to generate 1.56 times more return on investment than Marqeta. However, GigaCloud Technology is 1.56 times more volatile than Marqeta. It trades about 0.07 of its potential returns per unit of risk. Marqeta is currently generating about 0.0 per unit of risk. If you would invest  560.00  in GigaCloud Technology Class on September 19, 2024 and sell it today you would earn a total of  1,409  from holding GigaCloud Technology Class or generate 251.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

GigaCloud Technology Class  vs.  Marqeta

GigaCloud Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GigaCloud Technology Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, GigaCloud Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with GigaCloud Technology and Marqeta

The main advantage of trading using opposite GigaCloud Technology and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaCloud Technology 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 GigaCloud Technology Class 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.