Correlation Between Bakkt Holdings and Apple
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and Apple 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 Bakkt Holdings and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings Warrant and Apple Inc, you can compare the effects of market volatilities on Bakkt Holdings and Apple 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 Bakkt Holdings with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and Apple.
Diversification Opportunities for Bakkt Holdings and Apple
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bakkt and Apple is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings Warrant and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Bakkt Holdings 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 Bakkt Holdings Warrant are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and Apple go up and down completely randomly.
Pair Corralation between Bakkt Holdings and Apple
Assuming the 90 days trading horizon Bakkt Holdings Warrant is expected to generate 20.25 times more return on investment than Apple. However, Bakkt Holdings is 20.25 times more volatile than Apple Inc. It trades about 0.09 of its potential returns per unit of risk. Apple Inc is currently generating about 0.12 per unit of risk. If you would invest 19.00 in Bakkt Holdings Warrant on September 5, 2024 and sell it today you would earn a total of 22.00 from holding Bakkt Holdings Warrant or generate 115.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.0% |
| Values | Daily Returns |
Bakkt Holdings Warrant vs. Apple Inc
Performance |
| Timeline |
| Bakkt Holdings Warrant |
| Apple Inc |
Bakkt Holdings and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and Apple
The main advantage of trading using opposite Bakkt Holdings and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.The idea behind Bakkt Holdings Warrant and Apple Inc 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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