Correlation Between Marblegate Acquisition and Visa

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

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

Diversification Opportunities for Marblegate Acquisition and Visa

-0.26

Correlation Coefficient

Marblegate Acquisition  Visa

Very good diversification

The 3 months correlation between Marblegate and Visa is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Marblegate Acquisition Corp and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Marblegate Acquisition 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 Marblegate Acquisition Corp are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Marblegate Acquisition i.e., Marblegate Acquisition and Visa go up and down completely randomly.

Pair Corralation between Marblegate Acquisition and Visa

Assuming the 90 days horizon Marblegate Acquisition Corp is expected to generate 3.22 times more return on investment than Visa. However, Marblegate Acquisition is 3.22 times more volatile than Visa Class A. It trades about 0.04 of its potential returns per unit of risk. Visa Class A is currently generating about 0.14 per unit of risk. If you would invest  3.00  in Marblegate Acquisition Corp on September 4, 2024 and sell it today you would earn a total of  0.20  from holding Marblegate Acquisition Corp or generate 6.67% return on investment over 90 days.

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

Marblegate Acquisition Corp  vs.  Visa Class A

Marblegate Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marblegate Acquisition Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Marblegate Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Visa Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Marblegate Acquisition and Visa

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

The idea behind Marblegate Acquisition Corp and Visa Class A 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.