Correlation Between Far East and Kaltura

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

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

Diversification Opportunities for Far East and Kaltura

0.0

Correlation Coefficient

Far East  Kaltura

Pay attention - limited upside

The 3 months correlation between Far and Kaltura is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Far East Wind and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Far East 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 Far East Wind are associated (or correlated) with Kaltura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaltura has no effect on the direction of Far East i.e., Far East and Kaltura go up and down completely randomly.

Pair Corralation between Far East and Kaltura

If you would invest  223.00  in Kaltura on December 27, 2024 and sell it today you would lose (14.00) from holding Kaltura or give up 6.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Far East Wind  vs.  Kaltura

Far East Wind

Risk-Adjusted Performance

Very Weak

Over the last 90 days Far East Wind has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Far East is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Kaltura

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaltura has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kaltura is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Far East and Kaltura

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

The idea behind Far East Wind and Kaltura 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.