Correlation Between Marqeta and Oracle

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

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

Diversification Opportunities for Marqeta and Oracle

-0.59

Correlation Coefficient

Marqeta  Oracle

Excellent diversification

The 3 months correlation between Marqeta and Oracle is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Marqeta and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle 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 Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of Marqeta i.e., Marqeta and Oracle go up and down completely randomly.

Pair Corralation between Marqeta and Oracle

Allowing for the 90-day total investment horizon Marqeta is expected to generate 1.07 times more return on investment than Oracle. However, Marqeta is 1.07 times more volatile than Oracle. It trades about -0.1 of its potential returns per unit of risk. Oracle is currently generating about -0.25 per unit of risk. If you would invest  396.00  in Marqeta on September 22, 2024 and sell it today you would lose (21.00) from holding Marqeta or give up 5.3% of portfolio value over 90 days.

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

Marqeta  vs.  Oracle

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 unsteady 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.

Oracle

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Oracle is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Marqeta and Oracle

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

The idea behind Marqeta and Oracle 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.