Correlation Between Kaltura and Diguang Intl

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

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

Diversification Opportunities for Kaltura and Diguang Intl

-0.43

Correlation Coefficient

Kaltura  Diguang Intl

Very good diversification

The 3 months correlation between Kaltura and Diguang is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Diguang Intl Dev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diguang Intl Dev and Kaltura 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 Kaltura are associated (or correlated) with Diguang Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diguang Intl Dev has no effect on the direction of Kaltura i.e., Kaltura and Diguang Intl go up and down completely randomly.

Pair Corralation between Kaltura and Diguang Intl

Given the investment horizon of 90 days Kaltura is expected to generate 8.36 times less return on investment than Diguang Intl. But when comparing it to its historical volatility, Kaltura is 19.49 times less risky than Diguang Intl. It trades about 0.26 of its potential returns per unit of risk. Diguang Intl Dev is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Diguang Intl Dev on October 7, 2024 and sell it today you would earn a total of  0.01  from holding Diguang Intl Dev or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Kaltura  vs.  Diguang Intl Dev

Kaltura

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Diguang Intl Dev

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Diguang Intl Dev are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Diguang Intl reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaltura and Diguang Intl

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

The idea behind Kaltura and Diguang Intl Dev 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.