Correlation Between Bakkt Holdings and National Rural
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and National Rural 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 National Rural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings and National Rural Utilities, you can compare the effects of market volatilities on Bakkt Holdings and National Rural 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 National Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and National Rural.
Diversification Opportunities for Bakkt Holdings and National Rural
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bakkt and National is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings and National Rural Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Rural Utilities 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 National Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Rural Utilities has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and National Rural go up and down completely randomly.
Pair Corralation between Bakkt Holdings and National Rural
Given the investment horizon of 90 days Bakkt Holdings is expected to generate 5.23 times more return on investment than National Rural. However, Bakkt Holdings is 5.23 times more volatile than National Rural Utilities. It trades about 0.06 of its potential returns per unit of risk. National Rural Utilities is currently generating about 0.14 per unit of risk. If you would invest 2,779 in Bakkt Holdings on October 24, 2024 and sell it today you would earn a total of 105.00 from holding Bakkt Holdings or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakkt Holdings vs. National Rural Utilities
Performance |
| Timeline |
| Bakkt Holdings |
| National Rural Utilities |
Bakkt Holdings and National Rural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and National Rural
The main advantage of trading using opposite Bakkt Holdings and National Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, National Rural 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 National Rural will offset losses from the drop in National Rural'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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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