Correlation Between AvePoint and Katapult Holdings

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

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

Diversification Opportunities for AvePoint and Katapult Holdings

-0.86

Correlation Coefficient

AvePoint  Katapult Holdings

Pay attention - limited upside

The 3 months correlation between AvePoint and Katapult is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AvePoint and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings and AvePoint 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 AvePoint 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 AvePoint i.e., AvePoint and Katapult Holdings go up and down completely randomly.

Pair Corralation between AvePoint and Katapult Holdings

Assuming the 90 days horizon AvePoint is expected to generate 1.32 times more return on investment than Katapult Holdings. However, AvePoint is 1.32 times more volatile than Katapult Holdings. It trades about 0.3 of its potential returns per unit of risk. Katapult Holdings is currently generating about -0.17 per unit of risk. If you would invest  251.00  in AvePoint on September 21, 2024 and sell it today you would earn a total of  400.00  from holding AvePoint or generate 159.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

AvePoint  vs.  Katapult Holdings

AvePoint

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AvePoint are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AvePoint showed solid returns over the last few months and may actually be approaching a breakup point.

Katapult Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Katapult Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AvePoint and Katapult Holdings

The main advantage of trading using opposite AvePoint and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AvePoint 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 AvePoint 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.