Correlation Between Katapult Holdings and STRATS SM

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

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

Diversification Opportunities for Katapult Holdings and STRATS SM

-0.39

Correlation Coefficient

Katapult Holdings  STRATS SM

Very good diversification

The 3 months correlation between Katapult and STRATS is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and STRATS SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATS SM Trust 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 Equity are associated (or correlated) with STRATS SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATS SM Trust has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and STRATS SM go up and down completely randomly.

Pair Corralation between Katapult Holdings and STRATS SM

Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 11.94 times more return on investment than STRATS SM. However, Katapult Holdings is 11.94 times more volatile than STRATS SM Trust. It trades about 0.07 of its potential returns per unit of risk. STRATS SM Trust is currently generating about 0.02 per unit of risk. If you would invest  7.50  in Katapult Holdings Equity on September 14, 2024 and sell it today you would lose (6.95) from holding Katapult Holdings Equity or give up 92.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.87%
Values	Daily Returns

Katapult Holdings Equity  vs.  STRATS SM Trust

Katapult Holdings Equity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Katapult Holdings Equity are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Katapult Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

STRATS SM Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STRATS SM Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking indicators, STRATS SM is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Katapult Holdings and STRATS SM

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

The idea behind Katapult Holdings Equity and STRATS SM Trust 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.