Correlation Between Katapult Holdings and Morningstar Unconstrained

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

By analyzing existing cross correlation between Katapult Holdings and Morningstar Unconstrained Allocation, you can compare the effects of market volatilities on Katapult Holdings and Morningstar Unconstrained 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 Morningstar Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and Morningstar Unconstrained.

Diversification Opportunities for Katapult Holdings and Morningstar Unconstrained

0.03

Correlation Coefficient

Katapult Holdings  Morningstar Unconstrained

Significant diversification

The 3 months correlation between Katapult and Morningstar is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings and Morningstar Unconstrained Allo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Unconstrained 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 Morningstar Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Unconstrained has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Morningstar Unconstrained go up and down completely randomly.

Pair Corralation between Katapult Holdings and Morningstar Unconstrained

Given the investment horizon of 90 days Katapult Holdings is expected to generate 6.94 times more return on investment than Morningstar Unconstrained. However, Katapult Holdings is 6.94 times more volatile than Morningstar Unconstrained Allocation. It trades about 0.01 of its potential returns per unit of risk. Morningstar Unconstrained Allocation is currently generating about -0.17 per unit of risk. If you would invest  600.00  in Katapult Holdings on September 21, 2024 and sell it today you would lose (8.00) from holding Katapult Holdings or give up 1.33% of portfolio value over 90 days.

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

Katapult Holdings  vs.  Morningstar Unconstrained Allo

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.

Morningstar Unconstrained

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morningstar Unconstrained Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Morningstar Unconstrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Katapult Holdings and Morningstar Unconstrained

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

The idea behind Katapult Holdings and Morningstar Unconstrained Allocation 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.