Correlation Between Katapult Holdings and Joint Stock

Can any of the company-specific risk be diversified away by investing in both Katapult Holdings and Joint Stock 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 Joint Stock 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 Joint Stock, you can compare the effects of market volatilities on Katapult Holdings and Joint Stock 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 Joint Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and Joint Stock.

Diversification Opportunities for Katapult Holdings and Joint Stock

0.37

Correlation Coefficient

Katapult Holdings  Joint Stock

Weak diversification

The 3 months correlation between Katapult and Joint is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Joint Stock go up and down completely randomly.

Pair Corralation between Katapult Holdings and Joint Stock

Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 5.6 times more return on investment than Joint Stock. However, Katapult Holdings is 5.6 times more volatile than Joint Stock. It trades about 0.07 of its potential returns per unit of risk. Joint Stock is currently generating about -0.03 per unit of risk. If you would invest  0.56  in Katapult Holdings Equity on September 25, 2024 and sell it today you would earn a total of  0.03  from holding Katapult Holdings Equity or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

Katapult Holdings Equity  vs.  Joint Stock

Katapult Holdings Equity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Katapult Holdings Equity are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Katapult Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Joint Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joint Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Joint Stock is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Katapult Holdings and Joint Stock

The main advantage of trading using opposite Katapult Holdings and Joint Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katapult Holdings position performs unexpectedly, Joint Stock 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 Joint Stock will offset losses from the drop in Joint Stock's long position.

The idea behind Katapult Holdings Equity and Joint Stock 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.