Correlation Between Marqeta and Edgio

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

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

Diversification Opportunities for Marqeta and Edgio

0.32

Correlation Coefficient

Marqeta  Edgio

Weak diversification

The 3 months correlation between Marqeta and Edgio is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Edgio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgio Inc 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 Edgio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgio Inc has no effect on the direction of Marqeta i.e., Marqeta and Edgio go up and down completely randomly.

Pair Corralation between Marqeta and Edgio

Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Edgio. But the stock apears to be less risky and, when comparing its historical volatility, Marqeta is 41.24 times less risky than Edgio. The stock trades about -0.02 of its potential returns per unit of risk. The Edgio Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  214.00  in Edgio Inc on September 12, 2024 and sell it today you would lose (212.00) from holding Edgio Inc or give up 99.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.13%
Values	Daily Returns

Marqeta  vs.  Edgio Inc

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 relatively invariable basic indicators, Marqeta is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Edgio Inc

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Edgio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak forward indicators, Edgio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marqeta and Edgio

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

The idea behind Marqeta and Edgio Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.