Correlation Between Nextera Energy and Kaltura
Can any of the company-specific risk be diversified away by investing in both Nextera Energy 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 Nextera Energy and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextera Energy and Kaltura, you can compare the effects of market volatilities on Nextera Energy 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 Nextera Energy with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextera Energy and Kaltura.
Diversification Opportunities for Nextera Energy and Kaltura
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nextera and Kaltura is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nextera Energy and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Nextera Energy 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 Nextera Energy 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 Nextera Energy i.e., Nextera Energy and Kaltura go up and down completely randomly.
Pair Corralation between Nextera Energy and Kaltura
Considering the 90-day investment horizon Nextera Energy is expected to generate 15.3 times less return on investment than Kaltura. But when comparing it to its historical volatility, Nextera Energy is 2.88 times less risky than Kaltura. It trades about 0.03 of its potential returns per unit of risk. Kaltura is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 120.00 in Kaltura on September 26, 2024 and sell it today you would earn a total of 115.00 from holding Kaltura or generate 95.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nextera Energy vs. Kaltura
Performance |
Timeline |
Nextera Energy |
Kaltura |
Nextera Energy and Kaltura Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nextera Energy and Kaltura
The main advantage of trading using opposite Nextera Energy and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextera Energy 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 Nextera Energy 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.Kaltura vs. Dubber Limited | Kaltura vs. Advanced Health Intelligence | Kaltura vs. Danavation Technologies Corp | Kaltura vs. BASE Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |