Correlation Between Arqit Quantum and Katapult Holdings

Can any of the company-specific risk be diversified away by investing in both Arqit Quantum 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 Arqit Quantum and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arqit Quantum and Katapult Holdings, you can compare the effects of market volatilities on Arqit Quantum 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 Arqit Quantum with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arqit Quantum and Katapult Holdings.

Diversification Opportunities for Arqit Quantum and Katapult Holdings

-0.72

Correlation Coefficient

Arqit Quantum  Katapult Holdings

Pay attention - limited upside

The 3 months correlation between Arqit and Katapult is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings and Arqit Quantum 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 Arqit Quantum 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 Arqit Quantum i.e., Arqit Quantum and Katapult Holdings go up and down completely randomly.

Pair Corralation between Arqit Quantum and Katapult Holdings

Given the investment horizon of 90 days Arqit Quantum is expected to under-perform the Katapult Holdings. In addition to that, Arqit Quantum is 1.58 times more volatile than Katapult Holdings. It trades about -0.07 of its total potential returns per unit of risk. Katapult Holdings is currently generating about 0.24 per unit of volatility. If you would invest  564.00  in Katapult Holdings on December 26, 2024 and sell it today you would earn a total of  892.00  from holding Katapult Holdings or generate 158.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Arqit Quantum  vs.  Katapult Holdings

Arqit Quantum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arqit Quantum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Katapult Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Katapult Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Katapult Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arqit Quantum and Katapult Holdings

The main advantage of trading using opposite Arqit Quantum and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arqit Quantum 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 Arqit Quantum and Katapult Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.