Correlation Between MicroAlgo and Katapult Holdings

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

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

Diversification Opportunities for MicroAlgo and Katapult Holdings

-0.03

Correlation Coefficient

MicroAlgo  Katapult Holdings

Good diversification

The 3 months correlation between MicroAlgo and Katapult is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and Katapult Holdings Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katapult Holdings Equity and MicroAlgo 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 MicroAlgo are associated (or correlated) with Katapult Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katapult Holdings Equity has no effect on the direction of MicroAlgo i.e., MicroAlgo and Katapult Holdings go up and down completely randomly.

Pair Corralation between MicroAlgo and Katapult Holdings

Given the investment horizon of 90 days MicroAlgo is expected to generate 3.93 times more return on investment than Katapult Holdings. However, MicroAlgo is 3.93 times more volatile than Katapult Holdings Equity. It trades about 0.15 of its potential returns per unit of risk. Katapult Holdings Equity is currently generating about 0.1 per unit of risk. If you would invest  407.00  in MicroAlgo on December 30, 2024 and sell it today you would earn a total of  1,328  from holding MicroAlgo or generate 326.29% return on investment over 90 days.

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

MicroAlgo  vs.  Katapult Holdings Equity

MicroAlgo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MicroAlgo are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, MicroAlgo displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with MicroAlgo and Katapult Holdings

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

The idea behind MicroAlgo and Katapult Holdings Equity 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 Stocks Directory module to find actively traded stocks across global markets.