Correlation Between Katapult Holdings and NetScout Systems
Can any of the company-specific risk be diversified away by investing in both Katapult Holdings and NetScout Systems 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 NetScout Systems 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 NetScout Systems, you can compare the effects of market volatilities on Katapult Holdings and NetScout Systems 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 NetScout Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and NetScout Systems.
Diversification Opportunities for Katapult Holdings and NetScout Systems
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Katapult and NetScout is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and NetScout Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetScout Systems 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 NetScout Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetScout Systems has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and NetScout Systems go up and down completely randomly.
Pair Corralation between Katapult Holdings and NetScout Systems
Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 6.54 times more return on investment than NetScout Systems. However, Katapult Holdings is 6.54 times more volatile than NetScout Systems. It trades about 0.14 of its potential returns per unit of risk. NetScout Systems is currently generating about 0.16 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 Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Katapult Holdings Equity vs. NetScout Systems
Performance |
| Timeline |
| Katapult Holdings Equity |
| NetScout Systems |
Katapult Holdings and NetScout Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Katapult Holdings and NetScout Systems
The main advantage of trading using opposite Katapult Holdings and NetScout Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katapult Holdings position performs unexpectedly, NetScout Systems 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 NetScout Systems will offset losses from the drop in NetScout Systems' long position.| Katapult Holdings vs. AvePoint | Katapult Holdings vs. Katapult Holdings | Katapult Holdings vs. WM Technology |
| NetScout Systems vs. Progress Software | NetScout Systems vs. CommVault Systems | NetScout Systems vs. Blackbaud | NetScout Systems vs. ACI Worldwide |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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