Correlation Between Katipult Technology and Nicola Mining

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

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

Diversification Opportunities for Katipult Technology and Nicola Mining

0.26

Correlation Coefficient

Katipult Technology  Nicola Mining

Modest diversification

The 3 months correlation between Katipult and Nicola is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Katipult Technology Corp and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Katipult Technology 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 Katipult Technology Corp are associated (or correlated) with Nicola Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicola Mining has no effect on the direction of Katipult Technology i.e., Katipult Technology and Nicola Mining go up and down completely randomly.

Pair Corralation between Katipult Technology and Nicola Mining

Assuming the 90 days trading horizon Katipult Technology Corp is expected to generate 1.88 times more return on investment than Nicola Mining. However, Katipult Technology is 1.88 times more volatile than Nicola Mining. It trades about 0.03 of its potential returns per unit of risk. Nicola Mining is currently generating about 0.04 per unit of risk. If you would invest  8.50  in Katipult Technology Corp on October 4, 2024 and sell it today you would lose (7.50) from holding Katipult Technology Corp or give up 88.24% of portfolio value over 90 days.

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

Katipult Technology Corp  vs.  Nicola Mining

Katipult Technology Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Katipult Technology Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Katipult Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Nicola Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nicola Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nicola Mining is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Katipult Technology and Nicola Mining

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

The idea behind Katipult Technology Corp and Nicola Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.