Correlation Between Katapult Holdings and T Rowe
Can any of the company-specific risk be diversified away by investing in both Katapult Holdings and T Rowe 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 T Rowe 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 T Rowe Price, you can compare the effects of market volatilities on Katapult Holdings and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and T Rowe.
Diversification Opportunities for Katapult Holdings and T Rowe
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Katapult and RRTLX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and T Rowe go up and down completely randomly.
Pair Corralation between Katapult Holdings and T Rowe
Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 56.04 times more return on investment than T Rowe. However, Katapult Holdings is 56.04 times more volatile than T Rowe Price. It trades about 0.07 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.11 per unit of risk. If you would invest 0.57 in Katapult Holdings Equity on August 26, 2024 and sell it today you would lose (0.01) from holding Katapult Holdings Equity or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Katapult Holdings Equity vs. T Rowe Price
Performance |
| Timeline |
| Katapult Holdings Equity |
| T Rowe Price |
Katapult Holdings and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Katapult Holdings and T Rowe
The main advantage of trading using opposite Katapult Holdings and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katapult Holdings position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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