Correlation Between Katapult Holdings and Paysafe

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

Diversification Opportunities for Katapult Holdings and Paysafe

-0.2

Correlation Coefficient

Katapult Holdings  Paysafe

Good diversification

The 3 months correlation between Katapult and Paysafe is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and Paysafe Ltd Wt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe Ltd Wt 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 Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe Ltd Wt has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and Paysafe go up and down completely randomly.

Pair Corralation between Katapult Holdings and Paysafe

Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 2.53 times more return on investment than Paysafe. However, Katapult Holdings is 2.53 times more volatile than Paysafe Ltd Wt. It trades about 0.1 of its potential returns per unit of risk. Paysafe Ltd Wt is currently generating about -0.05 per unit of risk. If you would invest  0.80  in Katapult Holdings Equity on December 30, 2024 and sell it today you would earn a total of  0.14  from holding Katapult Holdings Equity or generate 17.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Katapult Holdings Equity  vs.  Paysafe Ltd Wt

Katapult Holdings Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Katapult Holdings Equity are ranked lower than 8 (%) 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.

Paysafe Ltd Wt

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paysafe Ltd Wt has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Katapult Holdings and Paysafe

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

The idea behind Katapult Holdings Equity and Paysafe Ltd Wt 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.