Correlation Between Katapult Holdings and TransUnion

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

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

Diversification Opportunities for Katapult Holdings and TransUnion

0.25

Correlation Coefficient

Katapult Holdings  TransUnion

Modest diversification

The 3 months correlation between Katapult and TransUnion is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion 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 TransUnion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransUnion has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and TransUnion go up and down completely randomly.

Pair Corralation between Katapult Holdings and TransUnion

Given the investment horizon of 90 days Katapult Holdings is expected to under-perform the TransUnion. In addition to that, Katapult Holdings is 2.49 times more volatile than TransUnion. It trades about -0.01 of its total potential returns per unit of risk. TransUnion is currently generating about 0.06 per unit of volatility. If you would invest  5,579  in TransUnion on September 10, 2024 and sell it today you would earn a total of  4,388  from holding TransUnion or generate 78.65% return on investment over 90 days.

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

Katapult Holdings  vs.  TransUnion

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.

TransUnion

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TransUnion are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TransUnion is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Katapult Holdings and TransUnion

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

The idea behind Katapult Holdings and TransUnion 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.