Correlation Between RBC Bearings and Kaltura

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

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

Diversification Opportunities for RBC Bearings and Kaltura

0.91

Correlation Coefficient

RBC Bearings  Kaltura

Almost no diversification

The 3 months correlation between RBC and Kaltura is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and RBC Bearings 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 RBC Bearings Incorporated 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 RBC Bearings i.e., RBC Bearings and Kaltura go up and down completely randomly.

Pair Corralation between RBC Bearings and Kaltura

Considering the 90-day investment horizon RBC Bearings Incorporated is expected to under-perform the Kaltura. But the stock apears to be less risky and, when comparing its historical volatility, RBC Bearings Incorporated is 5.44 times less risky than Kaltura. The stock trades about -0.5 of its potential returns per unit of risk. The Kaltura is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  223.00  in Kaltura on September 25, 2024 and sell it today you would earn a total of  12.00  from holding Kaltura or generate 5.38% return on investment over 90 days.

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

RBC Bearings Incorporated  vs.  Kaltura

RBC Bearings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Bearings Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, RBC Bearings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Kaltura

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 17 (%) 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.

Pair Trading with RBC Bearings and Kaltura

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

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.