Correlation Between Bakkt Holdings and Phunware
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and Phunware 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 Phunware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings and Phunware, you can compare the effects of market volatilities on Bakkt Holdings and Phunware 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 Phunware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and Phunware.
Diversification Opportunities for Bakkt Holdings and Phunware
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bakkt and Phunware is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings and Phunware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phunware 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 Phunware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phunware has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and Phunware go up and down completely randomly.
Pair Corralation between Bakkt Holdings and Phunware
Given the investment horizon of 90 days Bakkt Holdings is expected to generate 1.28 times more return on investment than Phunware. However, Bakkt Holdings is 1.28 times more volatile than Phunware. It trades about 0.04 of its potential returns per unit of risk. Phunware is currently generating about -0.02 per unit of risk. If you would invest 4,325 in Bakkt Holdings on August 25, 2024 and sell it today you would lose (1,394) from holding Bakkt Holdings or give up 32.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.38% |
| Values | Daily Returns |
Bakkt Holdings vs. Phunware
Performance |
| Timeline |
| Bakkt Holdings |
| Phunware |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bakkt Holdings and Phunware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and Phunware
The main advantage of trading using opposite Bakkt Holdings and Phunware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, Phunware 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 Phunware will offset losses from the drop in Phunware's long position.| Bakkt Holdings vs. Arqit Quantum | Bakkt Holdings vs. Alarum Technologies | Bakkt Holdings vs. Edgio Inc | Bakkt Holdings vs. GigaCloud Technology Class |
| Phunware vs. Sweetgreen | Phunware vs. Dennys Corp | Phunware vs. Aegon NV ADR | Phunware vs. Maiden Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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