Correlation Between AvePoint and Katapult Holdings
Can any of the company-specific risk be diversified away by investing in both AvePoint 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 AvePoint and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AvePoint and Katapult Holdings, you can compare the effects of market volatilities on AvePoint 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 AvePoint with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AvePoint and Katapult Holdings.
Diversification Opportunities for AvePoint and Katapult Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AvePoint and Katapult is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AvePoint and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings and AvePoint 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 AvePoint 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 AvePoint i.e., AvePoint and Katapult Holdings go up and down completely randomly.
Pair Corralation between AvePoint and Katapult Holdings
Assuming the 90 days horizon AvePoint is expected to generate 1.07 times more return on investment than Katapult Holdings. However, AvePoint is 1.07 times more volatile than Katapult Holdings. It trades about 0.11 of its potential returns per unit of risk. Katapult Holdings is currently generating about -0.01 per unit of risk. If you would invest 120.00 in AvePoint on September 1, 2024 and sell it today you would earn a total of 534.00 from holding AvePoint or generate 445.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
AvePoint vs. Katapult Holdings
Performance |
| Timeline |
| AvePoint |
| Katapult Holdings |
AvePoint and Katapult Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AvePoint and Katapult Holdings
The main advantage of trading using opposite AvePoint and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AvePoint 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.The idea behind AvePoint and Katapult Holdings 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.| Katapult Holdings vs. Alarum Technologies | Katapult Holdings vs. Nutanix | Katapult Holdings vs. Palo Alto Networks | Katapult Holdings vs. GigaCloud Technology Class |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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