Correlation Between Bakkt Holdings and Digital World
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and Digital World 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 Digital World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings and Digital World Acquisition, you can compare the effects of market volatilities on Bakkt Holdings and Digital World 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 Digital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and Digital World.
Diversification Opportunities for Bakkt Holdings and Digital World
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bakkt and Digital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings and Digital World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital World Acquisition 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 are associated (or correlated) with Digital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital World Acquisition has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and Digital World go up and down completely randomly.
Pair Corralation between Bakkt Holdings and Digital World
Given the investment horizon of 90 days Bakkt Holdings is expected to generate 1.15 times less return on investment than Digital World. In addition to that, Bakkt Holdings is 1.55 times more volatile than Digital World Acquisition. It trades about 0.03 of its total potential returns per unit of risk. Digital World Acquisition is currently generating about 0.05 per unit of volatility. If you would invest 1,624 in Digital World Acquisition on November 2, 2024 and sell it today you would earn a total of 352.00 from holding Digital World Acquisition or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.67% |
| Values | Daily Returns |
Bakkt Holdings vs. Digital World Acquisition
Performance |
| Timeline |
| Bakkt Holdings |
| Digital World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bakkt Holdings and Digital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and Digital World
The main advantage of trading using opposite Bakkt Holdings and Digital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, Digital World 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 Digital World will offset losses from the drop in Digital World's long position.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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