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

-0.19

Correlation Coefficient

Consensus Cloud  Katapult Holdings

Good diversification

The 3 months correlation between Consensus and Katapult is -0.19. 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 149.36 times less return on investment than Katapult Holdings. But when comparing it to its historical volatility, Consensus Cloud Solutions is 2.5 times less risky than Katapult Holdings. It trades about 0.0 of its potential returns per unit of risk. Katapult Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  698.00  in Katapult Holdings on December 29, 2024 and sell it today you would earn a total of  492.00  from holding Katapult Holdings or generate 70.49% return on investment over 90 days.

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

Consensus Cloud Solutions  vs.  Katapult Holdings

Consensus Cloud Solutions

Risk-Adjusted Performance

Very Weak

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

Katapult Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Katapult Holdings are ranked lower than 11 (%) 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 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.

The idea behind Consensus Cloud Solutions 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..