Correlation Between Marqeta and Check Point

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

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

Diversification Opportunities for Marqeta and Check Point

0.45

Correlation Coefficient

Marqeta  Check Point

Very weak diversification

The 3 months correlation between Marqeta and Check is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Marqeta i.e., Marqeta and Check Point go up and down completely randomly.

Pair Corralation between Marqeta and Check Point

Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Check Point. In addition to that, Marqeta is 2.7 times more volatile than Check Point Software. It trades about -0.03 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.0 per unit of volatility. If you would invest  19,304  in Check Point Software on September 27, 2024 and sell it today you would lose (217.00) from holding Check Point Software or give up 1.12% of portfolio value over 90 days.

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

Marqeta  vs.  Check Point Software

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 uncertain 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.

Check Point Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Check Point Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Check Point is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Marqeta and Check Point

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

The idea behind Marqeta and Check Point Software 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.