Correlation Between Katapult Holdings and Viomi Technology

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

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

Diversification Opportunities for Katapult Holdings and Viomi Technology

-0.19

Correlation Coefficient

Katapult Holdings  Viomi Technology

Good diversification

The 3 months correlation between Katapult and Viomi is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings and Viomi Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viomi Technology ADR 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 Viomi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viomi Technology ADR has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Viomi Technology go up and down completely randomly.

Pair Corralation between Katapult Holdings and Viomi Technology

Given the investment horizon of 90 days Katapult Holdings is expected to generate 1.71 times more return on investment than Viomi Technology. However, Katapult Holdings is 1.71 times more volatile than Viomi Technology ADR. It trades about 0.06 of its potential returns per unit of risk. Viomi Technology ADR is currently generating about -0.07 per unit of risk. If you would invest  660.00  in Katapult Holdings on October 16, 2024 and sell it today you would earn a total of  26.00  from holding Katapult Holdings or generate 3.94% return on investment over 90 days.

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

Katapult Holdings  vs.  Viomi Technology ADR

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Viomi Technology ADR

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viomi Technology ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Viomi Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Katapult Holdings and Viomi Technology

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

The idea behind Katapult Holdings and Viomi Technology ADR 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.