Correlation Between Consensus Cloud and Katapult Holdings
Can any of the company-specific risk be diversified away by investing in both Consensus Cloud 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 Consensus Cloud and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consensus Cloud Solutions and Katapult Holdings, you can compare the effects of market volatilities on Consensus Cloud 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 Consensus Cloud with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consensus Cloud and Katapult Holdings.
Diversification Opportunities for Consensus Cloud and Katapult Holdings
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consensus and Katapult is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Consensus Cloud Solutions and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings and Consensus Cloud 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 Consensus Cloud Solutions 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 Consensus Cloud i.e., Consensus Cloud and Katapult Holdings go up and down completely randomly.
Pair Corralation between Consensus Cloud and Katapult Holdings
Given the investment horizon of 90 days Consensus Cloud is expected to generate 10.89 times less return on investment than Katapult Holdings. But when comparing it to its historical volatility, Consensus Cloud Solutions is 2.9 times less risky than Katapult Holdings. It trades about 0.03 of its potential returns per unit of risk. Katapult Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 730.00 in Katapult Holdings on December 4, 2024 and sell it today you would earn a total of 346.00 from holding Katapult Holdings or generate 47.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Consensus Cloud Solutions vs. Katapult Holdings
Performance |
Timeline |
Consensus Cloud Solutions |
Katapult Holdings |
Consensus Cloud and Katapult Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Consensus Cloud and Katapult Holdings
The main advantage of trading using opposite Consensus Cloud and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consensus Cloud 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.Consensus Cloud vs. Ziff Davis | Consensus Cloud vs. PC Connection | Consensus Cloud vs. N Able Inc | Consensus Cloud vs. Enfusion |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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