Correlation Between TransUnion and Katapult Holdings
Can any of the company-specific risk be diversified away by investing in both TransUnion 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 TransUnion and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransUnion and Katapult Holdings, you can compare the effects of market volatilities on TransUnion 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 TransUnion with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransUnion and Katapult Holdings.
Diversification Opportunities for TransUnion and Katapult Holdings
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TransUnion and Katapult is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TransUnion and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings and TransUnion 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 TransUnion 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 has no effect on the direction of TransUnion i.e., TransUnion and Katapult Holdings go up and down completely randomly.
Pair Corralation between TransUnion and Katapult Holdings
Considering the 90-day investment horizon TransUnion is expected to generate 0.33 times more return on investment than Katapult Holdings. However, TransUnion is 2.99 times less risky than Katapult Holdings. It trades about 0.04 of its potential returns per unit of risk. Katapult Holdings is currently generating about -0.08 per unit of risk. If you would invest 9,946 in TransUnion on September 5, 2024 and sell it today you would earn a total of 126.00 from holding TransUnion or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransUnion vs. Katapult Holdings
Performance |
| Timeline |
| TransUnion |
| Katapult Holdings |
TransUnion and Katapult Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransUnion and Katapult Holdings
The main advantage of trading using opposite TransUnion and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransUnion 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.| TransUnion vs. Katapult Holdings | TransUnion vs. Arqit Quantum | TransUnion vs. Marqeta | TransUnion vs. Veritone |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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