Correlation Between Palo Alto and Marqeta

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

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

Diversification Opportunities for Palo Alto and Marqeta

0.34

Correlation Coefficient

Palo Alto  Marqeta

Weak diversification

The 3 months correlation between Palo and Marqeta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Palo Alto Networks and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Palo Alto 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 Palo Alto Networks 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 Palo Alto i.e., Palo Alto and Marqeta go up and down completely randomly.

Pair Corralation between Palo Alto and Marqeta

Given the investment horizon of 90 days Palo Alto Networks is expected to under-perform the Marqeta. In addition to that, Palo Alto is 1.07 times more volatile than Marqeta. It trades about -0.07 of its total potential returns per unit of risk. Marqeta is currently generating about 0.25 per unit of volatility. If you would invest  409.00  in Marqeta on May 7, 2025 and sell it today you would earn a total of  150.00  from holding Marqeta or generate 36.67% return on investment over 90 days.

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

Palo Alto Networks  vs.  Marqeta

Palo Alto Networks

Risk-Adjusted Performance

Weakest

Over the last 90 days Palo Alto Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Marqeta

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marqeta are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Marqeta reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palo Alto and Marqeta

The main advantage of trading using opposite Palo Alto and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palo Alto 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 Palo Alto Networks 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.