Correlation Between Kaiser Aluminum and Kaltura

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Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum 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 Kaiser Aluminum and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Kaltura, you can compare the effects of market volatilities on Kaiser Aluminum 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 Kaiser Aluminum with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Kaltura.

Diversification Opportunities for Kaiser Aluminum and Kaltura

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Kaiser and Kaltura is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum i.e., Kaiser Aluminum and Kaltura go up and down completely randomly.

Pair Corralation between Kaiser Aluminum and Kaltura

Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 3.44 times less return on investment than Kaltura. But when comparing it to its historical volatility, Kaiser Aluminum is 1.42 times less risky than Kaltura. It trades about 0.01 of its potential returns per unit of risk. Kaltura is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  180.00  in Kaltura on September 23, 2024 and sell it today you would earn a total of  54.00  from holding Kaltura or generate 30.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Kaiser Aluminum  vs.  Kaltura

 Performance 
       Timeline  
Kaiser Aluminum 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Kaiser Aluminum and Kaltura Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kaiser Aluminum and Kaltura

The main advantage of trading using opposite Kaiser Aluminum and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum 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 Kaiser Aluminum 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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