Correlation Between PennantPark Floating and Kaltura

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

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

Diversification Opportunities for PennantPark Floating and Kaltura

-0.66

Correlation Coefficient

PennantPark Floating  Kaltura

Excellent diversification

The 3 months correlation between PennantPark and Kaltura is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and PennantPark Floating 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 PennantPark Floating Rate 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 PennantPark Floating i.e., PennantPark Floating and Kaltura go up and down completely randomly.

Pair Corralation between PennantPark Floating and Kaltura

Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the Kaltura. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 7.88 times less risky than Kaltura. The stock trades about -0.17 of its potential returns per unit of risk. The Kaltura is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Kaltura on September 19, 2024 and sell it today you would lose (2.00) from holding Kaltura or give up 1.0% of portfolio value over 90 days.

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

PennantPark Floating Rate  vs.  Kaltura

PennantPark Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PennantPark Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, PennantPark Floating is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Kaltura

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PennantPark Floating and Kaltura

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