Correlation Between WixCom and Marqeta

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

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

Diversification Opportunities for WixCom and Marqeta

-0.72

Correlation Coefficient

WixCom  Marqeta

Pay attention - limited upside

The 3 months correlation between WixCom and Marqeta is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding WixCom and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and WixCom 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 WixCom 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 WixCom i.e., WixCom and Marqeta go up and down completely randomly.

Pair Corralation between WixCom and Marqeta

Considering the 90-day investment horizon WixCom is expected to under-perform the Marqeta. But the stock apears to be less risky and, when comparing its historical volatility, WixCom is 1.32 times less risky than Marqeta. The stock trades about -0.14 of its potential returns per unit of risk. The Marqeta is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  377.00  in Marqeta on December 28, 2024 and sell it today you would earn a total of  62.00  from holding Marqeta or generate 16.45% return on investment over 90 days.

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

WixCom  vs.  Marqeta

WixCom

Risk-Adjusted Performance

Very Weak

Over the last 90 days WixCom 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 forward 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

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marqeta are ranked lower than 6 (%) 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 WixCom and Marqeta

The main advantage of trading using opposite WixCom and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WixCom 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 WixCom 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.