Correlation Between Alarum Technologies and Katapult Holdings
Can any of the company-specific risk be diversified away by investing in both Alarum Technologies and Katapult 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 Katapult 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 Katapult Holdings, you can compare the effects of market volatilities on Alarum Technologies and Katapult 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 Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarum Technologies and Katapult Holdings.
Diversification Opportunities for Alarum Technologies and Katapult Holdings
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alarum and Katapult is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alarum Technologies and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult 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 Katapult Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katapult Holdings has no effect on the direction of Alarum Technologies i.e., Alarum Technologies and Katapult Holdings go up and down completely randomly.
Pair Corralation between Alarum Technologies and Katapult Holdings
Given the investment horizon of 90 days Alarum Technologies is expected to generate 1.07 times more return on investment than Katapult Holdings. However, Alarum Technologies is 1.07 times more volatile than Katapult Holdings. It trades about 0.03 of its potential returns per unit of risk. Katapult Holdings is currently generating about -0.05 per unit of risk. If you would invest 1,270 in Alarum Technologies on September 1, 2024 and sell it today you would lose (6.00) from holding Alarum Technologies or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alarum Technologies vs. Katapult Holdings
Performance |
| Timeline |
| Alarum Technologies |
| Katapult Holdings |
Alarum Technologies and Katapult Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alarum Technologies and Katapult Holdings
The main advantage of trading using opposite Alarum Technologies and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alarum Technologies position performs unexpectedly, Katapult 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 Katapult Holdings will offset losses from the drop in Katapult Holdings' long position.| Alarum Technologies vs. Nutanix | Alarum Technologies vs. Palo Alto Networks | Alarum Technologies vs. GigaCloud Technology Class | Alarum Technologies vs. Pagaya Technologies |
| Katapult Holdings vs. Nutanix | Katapult Holdings vs. Palo Alto Networks | Katapult Holdings vs. GigaCloud Technology Class | Katapult 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |