Correlation Between Playstudios and Katapult Holdings
Can any of the company-specific risk be diversified away by investing in both Playstudios and Katapult 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 Playstudios and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playstudios and Katapult Holdings Equity, you can compare the effects of market volatilities on Playstudios and Katapult 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 Playstudios with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playstudios and Katapult Holdings.
Diversification Opportunities for Playstudios and Katapult Holdings
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playstudios and Katapult is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Playstudios and Katapult Holdings Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings Equity and Playstudios 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 Playstudios are associated (or correlated) with Katapult Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katapult Holdings Equity has no effect on the direction of Playstudios i.e., Playstudios and Katapult Holdings go up and down completely randomly.
Pair Corralation between Playstudios and Katapult Holdings
Given the investment horizon of 90 days Playstudios is expected to under-perform the Katapult Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Playstudios is 15.85 times less risky than Katapult Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Katapult Holdings Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Katapult Holdings Equity on August 28, 2024 and sell it today you would lose (10.43) from holding Katapult Holdings Equity or give up 94.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.14% |
| Values | Daily Returns |
Playstudios vs. Katapult Holdings Equity
Performance |
| Timeline |
| Playstudios |
| Katapult Holdings Equity |
Playstudios and Katapult Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playstudios and Katapult Holdings
The main advantage of trading using opposite Playstudios and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playstudios position performs unexpectedly, Katapult 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 Katapult Holdings will offset losses from the drop in Katapult Holdings' long position.The idea behind Playstudios and Katapult Holdings Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Katapult Holdings vs. AvePoint | Katapult Holdings vs. Katapult Holdings | Katapult Holdings vs. WM Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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