Correlation Between Katapult Holdings and MariaDB Plc

Can any of the company-specific risk be diversified away by investing in both Katapult Holdings and MariaDB Plc 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 MariaDB Plc 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 MariaDB Plc, you can compare the effects of market volatilities on Katapult Holdings and MariaDB Plc 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 MariaDB Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katapult Holdings and MariaDB Plc.

Diversification Opportunities for Katapult Holdings and MariaDB Plc

0.09

Correlation Coefficient

Katapult Holdings  MariaDB Plc

Significant diversification

The 3 months correlation between Katapult and MariaDB is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and MariaDB Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MariaDB Plc 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 MariaDB Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MariaDB Plc has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and MariaDB Plc go up and down completely randomly.

Pair Corralation between Katapult Holdings and MariaDB Plc

If you would invest  0.80  in Katapult Holdings Equity on September 2, 2024 and sell it today you would lose (0.16) from holding Katapult Holdings Equity or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Katapult Holdings Equity  vs.  MariaDB Plc

Katapult Holdings Equity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Katapult Holdings Equity are ranked lower than 2 (%) 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.

MariaDB Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MariaDB Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, MariaDB Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Katapult Holdings and MariaDB Plc

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

The idea behind Katapult Holdings Equity and MariaDB Plc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.