Correlation Between Katapult Holdings and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both Katapult Holdings and Bakkt Holdings 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 Bakkt Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Katapult Holdings Equity and Bakkt Holdings, you can compare the effects of market volatilities on Katapult Holdings and Bakkt Holdings 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 Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and Bakkt Holdings.
Diversification Opportunities for Katapult Holdings and Bakkt Holdings
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Katapult and Bakkt is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and Bakkt Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings 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 Equity are associated (or correlated) with Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Bakkt Holdings go up and down completely randomly.
Pair Corralation between Katapult Holdings and Bakkt Holdings
Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 2.54 times more return on investment than Bakkt Holdings. However, Katapult Holdings is 2.54 times more volatile than Bakkt Holdings. It trades about 0.14 of its potential returns per unit of risk. Bakkt Holdings is currently generating about -0.21 per unit of risk. If you would invest 0.78 in Katapult Holdings Equity on November 4, 2024 and sell it today you would earn a total of 0.19 from holding Katapult Holdings Equity or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Katapult Holdings Equity vs. Bakkt Holdings
Performance |
| Timeline |
| Katapult Holdings Equity |
| Bakkt Holdings |
Katapult Holdings and Bakkt Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Katapult Holdings and Bakkt Holdings
The main advantage of trading using opposite Katapult Holdings and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katapult Holdings position performs unexpectedly, Bakkt Holdings 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 Bakkt Holdings will offset losses from the drop in Bakkt Holdings' long position.| Katapult Holdings vs. AvePoint | Katapult Holdings vs. Katapult Holdings | Katapult Holdings vs. WM Technology |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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