Correlation Between I3 Verticals and Katapult Holdings

Can any of the company-specific risk be diversified away by investing in both I3 Verticals 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 I3 Verticals and Katapult Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between i3 Verticals and Katapult Holdings, you can compare the effects of market volatilities on I3 Verticals 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 I3 Verticals with a short position of Katapult Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of I3 Verticals and Katapult Holdings.

Diversification Opportunities for I3 Verticals and Katapult Holdings

0.31

Correlation Coefficient

I3 Verticals  Katapult Holdings

Weak diversification

The 3 months correlation between IIIV and Katapult is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding i3 Verticals and Katapult Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings and I3 Verticals 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 i3 Verticals 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 I3 Verticals i.e., I3 Verticals and Katapult Holdings go up and down completely randomly.

Pair Corralation between I3 Verticals and Katapult Holdings

Given the investment horizon of 90 days I3 Verticals is expected to generate 13.09 times less return on investment than Katapult Holdings. But when comparing it to its historical volatility, i3 Verticals is 3.45 times less risky than Katapult Holdings. It trades about 0.04 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 28, 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

i3 Verticals  vs.  Katapult Holdings

i3 Verticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in i3 Verticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, I3 Verticals is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 I3 Verticals and Katapult Holdings

The main advantage of trading using opposite I3 Verticals and Katapult Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I3 Verticals 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 i3 Verticals 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.