Correlation Between Marqeta and Pagaya Technologies

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

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

Diversification Opportunities for Marqeta and Pagaya Technologies

0.36

Correlation Coefficient

Marqeta  Pagaya Technologies

Weak diversification

The 3 months correlation between Marqeta and Pagaya is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Pagaya Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pagaya Technologies 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 Pagaya Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pagaya Technologies has no effect on the direction of Marqeta i.e., Marqeta and Pagaya Technologies go up and down completely randomly.

Pair Corralation between Marqeta and Pagaya Technologies

Allowing for the 90-day total investment horizon Marqeta is expected to generate 0.88 times more return on investment than Pagaya Technologies. However, Marqeta is 1.14 times less risky than Pagaya Technologies. It trades about -0.17 of its potential returns per unit of risk. Pagaya Technologies is currently generating about -0.28 per unit of risk. If you would invest  402.00  in Marqeta on September 26, 2024 and sell it today you would lose (35.00) from holding Marqeta or give up 8.71% of portfolio value over 90 days.

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

Marqeta  vs.  Pagaya Technologies

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.

Pagaya Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pagaya Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pagaya Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Marqeta and Pagaya Technologies

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

The idea behind Marqeta and Pagaya Technologies 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.