Correlation Between BlackBerry and Marqeta

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

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

Diversification Opportunities for BlackBerry and Marqeta

-0.36

Correlation Coefficient

BlackBerry  Marqeta

Very good diversification

The 3 months correlation between BlackBerry and Marqeta is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BlackBerry and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and BlackBerry 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 BlackBerry 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 BlackBerry i.e., BlackBerry and Marqeta go up and down completely randomly.

Pair Corralation between BlackBerry and Marqeta

Allowing for the 90-day total investment horizon BlackBerry is expected to generate 3.04 times more return on investment than Marqeta. However, BlackBerry is 3.04 times more volatile than Marqeta. It trades about 0.33 of its potential returns per unit of risk. Marqeta is currently generating about -0.14 per unit of risk. If you would invest  235.00  in BlackBerry on September 23, 2024 and sell it today you would earn a total of  134.00  from holding BlackBerry or generate 57.02% return on investment over 90 days.

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

BlackBerry  vs.  Marqeta

BlackBerry

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackBerry are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, BlackBerry sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with BlackBerry and Marqeta

The main advantage of trading using opposite BlackBerry and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackBerry 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 BlackBerry 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.