Correlation Between Marqeta and Bit Digital

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

By analyzing existing cross correlation between Marqeta and Bit Digital, you can compare the effects of market volatilities on Marqeta and Bit 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 Bit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marqeta and Bit Digital.

Diversification Opportunities for Marqeta and Bit Digital

-0.64

Correlation Coefficient

Marqeta  Bit Digital

Excellent diversification

The 3 months correlation between Marqeta and Bit is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit 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 Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of Marqeta i.e., Marqeta and Bit Digital go up and down completely randomly.

Pair Corralation between Marqeta and Bit Digital

Allowing for the 90-day total investment horizon Marqeta is expected to generate 0.61 times more return on investment than Bit Digital. However, Marqeta is 1.63 times less risky than Bit Digital. It trades about 0.1 of its potential returns per unit of risk. Bit Digital is currently generating about -0.07 per unit of risk. If you would invest  365.00  in Marqeta on December 27, 2024 and sell it today you would earn a total of  74.00  from holding Marqeta or generate 20.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Marqeta  vs.  Bit Digital

Marqeta

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marqeta are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Marqeta reported solid returns over the last few months and may actually be approaching a breakup point.

Bit Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bit Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Marqeta and Bit Digital

The main advantage of trading using opposite Marqeta and Bit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta position performs unexpectedly, Bit 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 Bit Digital will offset losses from the drop in Bit Digital's long position.

The idea behind Marqeta and Bit 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.