Correlation Between Katapult Holdings and DatChat

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

Diversification Opportunities for Katapult Holdings and DatChat

-0.06

Correlation Coefficient

Katapult Holdings  DatChat

Good diversification

The 3 months correlation between Katapult and DatChat is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Katapult Holdings Equity and DatChat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DatChat 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 DatChat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DatChat has no effect on the direction of Katapult Holdings i.e., Katapult Holdings and DatChat go up and down completely randomly.

Pair Corralation between Katapult Holdings and DatChat

Assuming the 90 days horizon Katapult Holdings Equity is expected to generate 3.1 times more return on investment than DatChat. However, Katapult Holdings is 3.1 times more volatile than DatChat. It trades about 0.14 of its potential returns per unit of risk. DatChat is currently generating about 0.0 per unit of risk. If you would invest  0.73  in Katapult Holdings Equity on May 2, 2025 and sell it today you would earn a total of  0.38  from holding Katapult Holdings Equity or generate 52.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	69.35%
Values	Daily Returns

Katapult Holdings Equity  vs.  DatChat

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 10 (%) 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.

DatChat

Risk-Adjusted Performance

Very Weak

Over the last 90 days DatChat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, DatChat is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Katapult Holdings and DatChat

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

The idea behind Katapult Holdings Equity and DatChat 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.