Correlation Between Phunware and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both Phunware 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 Phunware and Bakkt Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phunware and Bakkt Holdings, you can compare the effects of market volatilities on Phunware 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 Phunware with a short position of Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phunware and Bakkt Holdings.
Diversification Opportunities for Phunware and Bakkt Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Phunware and Bakkt is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Phunware and Bakkt Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings and Phunware 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 Phunware 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 Phunware i.e., Phunware and Bakkt Holdings go up and down completely randomly.
Pair Corralation between Phunware and Bakkt Holdings
Given the investment horizon of 90 days Phunware is expected to under-perform the Bakkt Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Phunware is 4.06 times less risky than Bakkt Holdings. The stock trades about -0.38 of its potential returns per unit of risk. The Bakkt Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,168 in Bakkt Holdings on August 27, 2024 and sell it today you would earn a total of 1,633 from holding Bakkt Holdings or generate 139.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phunware vs. Bakkt Holdings
Performance |
| Timeline |
| Phunware |
| Bakkt Holdings |
Phunware and Bakkt Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phunware and Bakkt Holdings
The main advantage of trading using opposite Phunware and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phunware 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.| Phunware vs. HeartCore Enterprises | Phunware vs. Beamr Imaging Ltd | Phunware vs. AMTD Digital | Phunware vs. CXApp Inc |
| Bakkt Holdings vs. Arqit Quantum | Bakkt Holdings vs. Alarum Technologies | Bakkt Holdings vs. Edgio Inc | Bakkt Holdings vs. GigaCloud Technology Class |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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