Correlation Between Marqeta and Amdocs
Can any of the company-specific risk be diversified away by investing in both Marqeta and Amdocs 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 Amdocs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marqeta and Amdocs, you can compare the effects of market volatilities on Marqeta and Amdocs 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 Amdocs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marqeta and Amdocs.
Diversification Opportunities for Marqeta and Amdocs
Poor diversification
The 3 months correlation between Marqeta and Amdocs is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Amdocs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs 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 Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs has no effect on the direction of Marqeta i.e., Marqeta and Amdocs go up and down completely randomly.
Pair Corralation between Marqeta and Amdocs
Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Amdocs. In addition to that, Marqeta is 3.49 times more volatile than Amdocs. It trades about 0.0 of its total potential returns per unit of risk. Amdocs is currently generating about 0.02 per unit of volatility. If you would invest 7,992 in Amdocs on February 7, 2024 and sell it today you would earn a total of 503.00 from holding Amdocs or generate 6.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Marqeta vs. Amdocs
Performance |
Timeline |
Marqeta |
Amdocs |
Marqeta and Amdocs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marqeta and Amdocs
The main advantage of trading using opposite Marqeta and Amdocs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marqeta position performs unexpectedly, Amdocs 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 Amdocs will offset losses from the drop in Amdocs' long position.The idea behind Marqeta and Amdocs 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.Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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