Correlation Between Marqeta and Katapult Holdings

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

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

Diversification Opportunities for Marqeta and Katapult Holdings

0.65

Correlation Coefficient

Marqeta  Katapult Holdings

Poor diversification

The 3 months correlation between Marqeta and Katapult is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings 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 Katapult Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katapult Holdings has no effect on the direction of Marqeta i.e., Marqeta and Katapult Holdings go up and down completely randomly.

Pair Corralation between Marqeta and Katapult Holdings

Allowing for the 90-day total investment horizon Marqeta is expected to generate 1.3 times more return on investment than Katapult Holdings. However, Marqeta is 1.3 times more volatile than Katapult Holdings. It trades about -0.03 of its potential returns per unit of risk. Katapult Holdings is currently generating about -0.1 per unit of risk. If you would invest  503.00  in Marqeta on September 5, 2024 and sell it today you would lose (119.00) from holding Marqeta or give up 23.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Marqeta  vs.  Katapult Holdings

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.

Katapult Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Marqeta and Katapult Holdings

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

The idea behind Marqeta and Katapult Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.