Correlation Between Katapult Holdings and Hamilton Beach

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

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

Diversification Opportunities for Katapult Holdings and Hamilton Beach

0.8

Correlation Coefficient

Katapult Holdings  Hamilton Beach

Very poor diversification

The 3 months correlation between Katapult and Hamilton is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands and Katapult Holdings 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 Katapult Holdings are associated (or correlated) with Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Hamilton Beach go up and down completely randomly.

Pair Corralation between Katapult Holdings and Hamilton Beach

Given the investment horizon of 90 days Katapult Holdings is expected to under-perform the Hamilton Beach. In addition to that, Katapult Holdings is 2.22 times more volatile than Hamilton Beach Brands. It trades about -0.11 of its total potential returns per unit of risk. Hamilton Beach Brands is currently generating about -0.23 per unit of volatility. If you would invest  1,952  in Hamilton Beach Brands on September 27, 2024 and sell it today you would lose (245.00) from holding Hamilton Beach Brands or give up 12.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Katapult Holdings  vs.  Hamilton Beach Brands

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.

Hamilton Beach Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hamilton Beach Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Katapult Holdings and Hamilton Beach

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

The idea behind Katapult Holdings and Hamilton Beach Brands 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.