Correlation Between Keurig Dr and Kaltura

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

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

Diversification Opportunities for Keurig Dr and Kaltura

-0.75

Correlation Coefficient

Keurig Dr  Kaltura

Pay attention - limited upside

The 3 months correlation between Keurig and Kaltura is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Keurig Dr 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 Keurig Dr Pepper 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 Keurig Dr i.e., Keurig Dr and Kaltura go up and down completely randomly.

Pair Corralation between Keurig Dr and Kaltura

Considering the 90-day investment horizon Keurig Dr Pepper is expected to generate 0.2 times more return on investment than Kaltura. However, Keurig Dr Pepper is 5.12 times less risky than Kaltura. It trades about -0.03 of its potential returns per unit of risk. Kaltura is currently generating about -0.05 per unit of risk. If you would invest  3,238  in Keurig Dr Pepper on October 4, 2024 and sell it today you would lose (26.00) from holding Keurig Dr Pepper or give up 0.8% of portfolio value over 90 days.

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

Keurig Dr Pepper  vs.  Kaltura

Keurig Dr Pepper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keurig Dr Pepper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Kaltura

Risk-Adjusted Performance

15 of 100

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 unfluctuating basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keurig Dr and Kaltura

The main advantage of trading using opposite Keurig Dr and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr 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 Keurig Dr Pepper 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.