Correlation Between Bakkt Holdings and International Money
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and International Money 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 International Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings and International Money Express, you can compare the effects of market volatilities on Bakkt Holdings and International Money 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 International Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and International Money.
Diversification Opportunities for Bakkt Holdings and International Money
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bakkt and International is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings and International Money Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Money 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 International Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Money has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and International Money go up and down completely randomly.
Pair Corralation between Bakkt Holdings and International Money
Given the investment horizon of 90 days Bakkt Holdings is expected to under-perform the International Money. In addition to that, Bakkt Holdings is 5.23 times more volatile than International Money Express. It trades about -0.21 of its total potential returns per unit of risk. International Money Express is currently generating about -0.25 per unit of volatility. If you would invest 2,052 in International Money Express on November 4, 2024 and sell it today you would lose (161.00) from holding International Money Express or give up 7.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakkt Holdings vs. International Money Express
Performance |
| Timeline |
| Bakkt Holdings |
| International Money |
Bakkt Holdings and International Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and International Money
The main advantage of trading using opposite Bakkt Holdings and International Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, International Money 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 International Money will offset losses from the drop in International Money's long position.| Bakkt Holdings vs. Arqit Quantum | Bakkt Holdings vs. Alarum Technologies | Bakkt Holdings vs. GigaCloud Technology Class | Bakkt Holdings vs. Pagaya Technologies |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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