Correlation Between Marqeta and GigaCloud Technology

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

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

Diversification Opportunities for Marqeta and GigaCloud Technology

-0.02

Correlation Coefficient

Marqeta  GigaCloud Technology

Good diversification

The 3 months correlation between Marqeta and GigaCloud is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and GigaCloud Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaCloud Technology 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 GigaCloud Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaCloud Technology has no effect on the direction of Marqeta i.e., Marqeta and GigaCloud Technology go up and down completely randomly.

Pair Corralation between Marqeta and GigaCloud Technology

Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the GigaCloud Technology. In addition to that, Marqeta is 1.07 times more volatile than GigaCloud Technology Class. It trades about -0.05 of its total potential returns per unit of risk. GigaCloud Technology Class is currently generating about 0.01 per unit of volatility. If you would invest  1,943  in GigaCloud Technology Class on September 19, 2024 and sell it today you would lose (108.00) from holding GigaCloud Technology Class or give up 5.56% of portfolio value over 90 days.

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

Marqeta  vs.  GigaCloud Technology Class

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.

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.

Pair Trading with Marqeta and GigaCloud Technology

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

The idea behind Marqeta and GigaCloud Technology Class 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 Anywhere module to track or share privately all of your investments from the convenience of any device.