Correlation Between Katapult Holdings and Marqeta
Can any of the company-specific risk be diversified away by investing in both Katapult Holdings and Marqeta 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 Katapult Holdings and Marqeta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Katapult Holdings and Marqeta, you can compare the effects of market volatilities on Katapult Holdings and Marqeta 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 Katapult Holdings with a short position of Marqeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and Marqeta.
Diversification Opportunities for Katapult Holdings and Marqeta
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Katapult and Marqeta is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings and Marqeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marqeta and Katapult 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 Katapult Holdings are associated (or correlated) with Marqeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marqeta has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Marqeta go up and down completely randomly.
Pair Corralation between Katapult Holdings and Marqeta
Given the investment horizon of 90 days Katapult Holdings is expected to generate 0.6 times more return on investment than Marqeta. However, Katapult Holdings is 1.67 times less risky than Marqeta. It trades about -0.05 of its potential returns per unit of risk. Marqeta is currently generating about -0.11 per unit of risk. If you would invest 842.00 in Katapult Holdings on September 1, 2024 and sell it today you would lose (86.00) from holding Katapult Holdings or give up 10.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Katapult Holdings vs. Marqeta
Performance |
| Timeline |
| Katapult Holdings |
| Marqeta |
Katapult Holdings and Marqeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Katapult Holdings and Marqeta
The main advantage of trading using opposite Katapult Holdings and Marqeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katapult Holdings position performs unexpectedly, Marqeta 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 Marqeta will offset losses from the drop in Marqeta's long position.| Katapult Holdings vs. Palo Alto Networks | Katapult Holdings vs. GigaCloud Technology Class | Katapult Holdings vs. Pagaya Technologies | Katapult Holdings vs. Telos Corp |
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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