Correlation Between MACYS and Kaltura

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

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

Diversification Opportunities for MACYS and Kaltura

-0.47

Correlation Coefficient

MACYS  Kaltura

Very good diversification

The 3 months correlation between MACYS and Kaltura is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding MACYS RETAIL HLDGS and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and MACYS 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 MACYS RETAIL HLDGS 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 MACYS i.e., MACYS and Kaltura go up and down completely randomly.

Pair Corralation between MACYS and Kaltura

Assuming the 90 days trading horizon MACYS RETAIL HLDGS is expected to under-perform the Kaltura. But the bond apears to be less risky and, when comparing its historical volatility, MACYS RETAIL HLDGS is 4.63 times less risky than Kaltura. The bond trades about 0.0 of its potential returns per unit of risk. The Kaltura is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  132.00  in Kaltura on October 14, 2024 and sell it today you would earn a total of  72.00  from holding Kaltura or generate 54.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

MACYS RETAIL HLDGS  vs.  Kaltura

MACYS RETAIL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MACYS RETAIL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MACYS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kaltura

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MACYS and Kaltura

The main advantage of trading using opposite MACYS and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MACYS 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 MACYS RETAIL HLDGS 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.