Correlation Between Evertec and Marqeta

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

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

Diversification Opportunities for Evertec and Marqeta

-0.7

Correlation Coefficient

Evertec  Marqeta

Excellent diversification

The 3 months correlation between Evertec and Marqeta is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Evertec 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 Evertec 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 Evertec i.e., Evertec and Marqeta go up and down completely randomly.

Pair Corralation between Evertec and Marqeta

Given the investment horizon of 90 days Evertec is expected to generate 0.2 times more return on investment than Marqeta. However, Evertec is 5.03 times less risky than Marqeta. It trades about 0.25 of its potential returns per unit of risk. Marqeta is currently generating about -0.1 per unit of risk. If you would invest  3,222  in Evertec on August 30, 2024 and sell it today you would earn a total of  363.00  from holding Evertec or generate 11.27% return on investment over 90 days.

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

Evertec  vs.  Marqeta

Evertec

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Evertec and Marqeta

The main advantage of trading using opposite Evertec and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec 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 Evertec 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.