Correlation Between Kaltura and United Fire

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

By analyzing existing cross correlation between Kaltura and United Fire Group, you can compare the effects of market volatilities on Kaltura and United Fire 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 United Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaltura and United Fire.

Diversification Opportunities for Kaltura and United Fire

-0.59

Correlation Coefficient

Kaltura  United Fire

Excellent diversification

The 3 months correlation between Kaltura and United is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and United Fire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Fire Group 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 United Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Fire Group has no effect on the direction of Kaltura i.e., Kaltura and United Fire go up and down completely randomly.

Pair Corralation between Kaltura and United Fire

Given the investment horizon of 90 days Kaltura is expected to under-perform the United Fire. In addition to that, Kaltura is 2.61 times more volatile than United Fire Group. It trades about -0.02 of its total potential returns per unit of risk. United Fire Group is currently generating about 0.05 per unit of volatility. If you would invest  2,821  in United Fire Group on December 28, 2024 and sell it today you would earn a total of  145.00  from holding United Fire Group or generate 5.14% return on investment over 90 days.

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

Kaltura  vs.  United Fire Group

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.

United Fire Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United Fire Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, United Fire may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kaltura and United Fire

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

The idea behind Kaltura and United Fire Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.