Correlation Between Paymentus Holdings and Marqeta

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

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

Diversification Opportunities for Paymentus Holdings and Marqeta

-0.58

Correlation Coefficient

Paymentus Holdings  Marqeta

Excellent diversification

The 3 months correlation between Paymentus and Marqeta is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Paymentus Holdings and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Paymentus Holdings 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 Paymentus Holdings are associated (or correlated) with Marqeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marqeta has no effect on the direction of Paymentus Holdings i.e., Paymentus Holdings and Marqeta go up and down completely randomly.

Pair Corralation between Paymentus Holdings and Marqeta

Considering the 90-day investment horizon Paymentus Holdings is expected to under-perform the Marqeta. In addition to that, Paymentus Holdings is 1.26 times more volatile than Marqeta. It trades about -0.07 of its total potential returns per unit of risk. Marqeta is currently generating about 0.07 per unit of volatility. 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

Paymentus Holdings  vs.  Marqeta

Paymentus Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paymentus Holdings 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Paymentus Holdings and Marqeta

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

The idea behind Paymentus Holdings and Marqeta 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.