Correlation Between Marqeta and BitFuFu

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

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

Diversification Opportunities for Marqeta and BitFuFu

-0.43

Correlation Coefficient

Marqeta  BitFuFu

Very good diversification

The 3 months correlation between Marqeta and BitFuFu is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Class A 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 BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of Marqeta i.e., Marqeta and BitFuFu go up and down completely randomly.

Pair Corralation between Marqeta and BitFuFu

Allowing for the 90-day total investment horizon Marqeta is expected to generate 0.67 times more return on investment than BitFuFu. However, Marqeta is 1.5 times less risky than BitFuFu. It trades about 0.07 of its potential returns per unit of risk. BitFuFu Class A is currently generating about 0.0 per unit of risk. If you would invest  377.00  in Marqeta on December 29, 2024 and sell it today you would earn a total of  42.00  from holding Marqeta or generate 11.14% return on investment over 90 days.

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

Marqeta  vs.  BitFuFu Class A

Marqeta

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marqeta are ranked lower than 5 (%) 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.

BitFuFu Class A

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Marqeta and BitFuFu

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

The idea behind Marqeta and BitFuFu Class A 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.