Correlation Between Sparta Capital and Katipult Technology

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

By analyzing existing cross correlation between Sparta Capital and Katipult Technology Corp, you can compare the effects of market volatilities on Sparta Capital and Katipult 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 Sparta Capital with a short position of Katipult Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and Katipult Technology.

Diversification Opportunities for Sparta Capital and Katipult Technology

0.02

Correlation Coefficient

Sparta Capital  Katipult Technology

Significant diversification

The 3 months correlation between Sparta and Katipult is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and Katipult Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katipult Technology Corp and Sparta Capital 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 Sparta Capital are associated (or correlated) with Katipult Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katipult Technology Corp has no effect on the direction of Sparta Capital i.e., Sparta Capital and Katipult Technology go up and down completely randomly.

Pair Corralation between Sparta Capital and Katipult Technology

Assuming the 90 days horizon Sparta Capital is expected to under-perform the Katipult Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sparta Capital is 7.02 times less risky than Katipult Technology. The stock trades about -0.13 of its potential returns per unit of risk. The Katipult Technology Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Katipult Technology Corp on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Katipult Technology Corp or generate 0.0% return on investment over 90 days.

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

Sparta Capital  vs.  Katipult Technology Corp

Sparta Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparta Capital 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 fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Katipult Technology Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Katipult Technology Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Katipult Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sparta Capital and Katipult Technology

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

The idea behind Sparta Capital and Katipult Technology Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.