Correlation Between Alarum Technologies and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both Alarum Technologies and Bakkt Holdings 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 Alarum Technologies and Bakkt Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alarum Technologies and Bakkt Holdings, you can compare the effects of market volatilities on Alarum Technologies and Bakkt Holdings 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 Alarum Technologies with a short position of Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarum Technologies and Bakkt Holdings.
Diversification Opportunities for Alarum Technologies and Bakkt Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alarum and Bakkt is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alarum Technologies and Bakkt Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings and Alarum Technologies 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 Alarum Technologies are associated (or correlated) with Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings has no effect on the direction of Alarum Technologies i.e., Alarum Technologies and Bakkt Holdings go up and down completely randomly.
Pair Corralation between Alarum Technologies and Bakkt Holdings
Given the investment horizon of 90 days Alarum Technologies is expected to under-perform the Bakkt Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Alarum Technologies is 1.9 times less risky than Bakkt Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Bakkt Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,779 in Bakkt Holdings on October 24, 2024 and sell it today you would earn a total of 105.00 from holding Bakkt Holdings or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Alarum Technologies vs. Bakkt Holdings
Performance |
| Timeline |
| Alarum Technologies |
| Bakkt Holdings |
Alarum Technologies and Bakkt Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alarum Technologies and Bakkt Holdings
The main advantage of trading using opposite Alarum Technologies and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alarum Technologies position performs unexpectedly, Bakkt Holdings 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 Bakkt Holdings will offset losses from the drop in Bakkt Holdings' long position.| Alarum Technologies vs. Arqit Quantum | Alarum Technologies vs. Nutanix | Alarum Technologies vs. Palo Alto Networks | Alarum Technologies vs. GigaCloud Technology Class |
| Bakkt Holdings vs. Arqit Quantum | Bakkt Holdings vs. Alarum Technologies | Bakkt Holdings vs. GigaCloud Technology Class | Bakkt Holdings vs. Pagaya Technologies |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |