Correlation Between Kaltura and HONEYWELL

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

Diversification Opportunities for Kaltura and HONEYWELL

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Kaltura and HONEYWELL is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and HONEYWELL INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTERNATIONAL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTERNATIONAL has no effect on the direction of Kaltura i.e., Kaltura and HONEYWELL go up and down completely randomly.

Pair Corralation between Kaltura and HONEYWELL

Given the investment horizon of 90 days Kaltura is expected to generate 1.69 times more return on investment than HONEYWELL. However, Kaltura is 1.69 times more volatile than HONEYWELL INTERNATIONAL INC. It trades about 0.2 of its potential returns per unit of risk. HONEYWELL INTERNATIONAL INC is currently generating about 0.05 per unit of risk. If you would invest  136.00  in Kaltura on September 23, 2024 and sell it today you would earn a total of  98.00  from holding Kaltura or generate 72.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy69.23%
ValuesDaily Returns

Kaltura  vs.  HONEYWELL INTERNATIONAL INC

 Performance 
       Timeline  
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.
HONEYWELL INTERNATIONAL 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in HONEYWELL INTERNATIONAL INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, HONEYWELL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kaltura and HONEYWELL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kaltura and HONEYWELL

The main advantage of trading using opposite Kaltura and HONEYWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaltura position performs unexpectedly, HONEYWELL 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 HONEYWELL will offset losses from the drop in HONEYWELL's long position.
The idea behind Kaltura and HONEYWELL INTERNATIONAL INC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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