Correlation Between Katapult Holdings and Via Renewables

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

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

Diversification Opportunities for Katapult Holdings and Via Renewables

-0.82

Correlation Coefficient

Katapult Holdings  Via Renewables

Pay attention - limited upside

The 3 months correlation between Katapult and Via is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Via Renewables go up and down completely randomly.

Pair Corralation between Katapult Holdings and Via Renewables

Given the investment horizon of 90 days Katapult Holdings is expected to generate 3.62 times less return on investment than Via Renewables. In addition to that, Katapult Holdings is 6.37 times more volatile than Via Renewables. It trades about 0.01 of its total potential returns per unit of risk. Via Renewables is currently generating about 0.25 per unit of volatility. If you would invest  2,239  in Via Renewables on September 21, 2024 and sell it today you would earn a total of  96.00  from holding Via Renewables or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Katapult Holdings  vs.  Via Renewables

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.

Via Renewables

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Katapult Holdings and Via Renewables

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

The idea behind Katapult Holdings and Via Renewables 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.