Correlation Between VeriSign and Katapult Holdings
Can any of the company-specific risk be diversified away by investing in both VeriSign 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 VeriSign and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VeriSign and Katapult Holdings Equity, you can compare the effects of market volatilities on VeriSign 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 VeriSign with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of VeriSign and Katapult Holdings.
Diversification Opportunities for VeriSign and Katapult Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VeriSign and Katapult is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding VeriSign 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 VeriSign 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 VeriSign 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 VeriSign i.e., VeriSign and Katapult Holdings go up and down completely randomly.
Pair Corralation between VeriSign and Katapult Holdings
Given the investment horizon of 90 days VeriSign is expected to generate 0.11 times more return on investment than Katapult Holdings. However, VeriSign is 9.34 times less risky than Katapult Holdings. It trades about 0.11 of its potential returns per unit of risk. Katapult Holdings Equity is currently generating about -0.08 per unit of risk. If you would invest 17,907 in VeriSign on August 28, 2024 and sell it today you would earn a total of 609.00 from holding VeriSign or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VeriSign vs. Katapult Holdings Equity
Performance |
| Timeline |
| VeriSign |
| Katapult Holdings Equity |
VeriSign and Katapult Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VeriSign and Katapult Holdings
The main advantage of trading using opposite VeriSign and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VeriSign 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 VeriSign 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |