Correlation Between Global Star and Kaltura

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

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

Diversification Opportunities for Global Star and Kaltura

0.27

Correlation Coefficient

Global Star  Kaltura

Modest diversification

The 3 months correlation between Global and Kaltura is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Global Star Acquisition and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Global Star 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 Global Star Acquisition 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 Global Star i.e., Global Star and Kaltura go up and down completely randomly.

Pair Corralation between Global Star and Kaltura

Assuming the 90 days horizon Global Star Acquisition is expected to under-perform the Kaltura. But the stock apears to be less risky and, when comparing its historical volatility, Global Star Acquisition is 11.5 times less risky than Kaltura. The stock trades about -0.02 of its potential returns per unit of risk. The Kaltura is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  112.00  in Kaltura on August 31, 2024 and sell it today you would earn a total of  104.00  from holding Kaltura or generate 92.86% return on investment over 90 days.

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

Global Star Acquisition  vs.  Kaltura

Global Star Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Star Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global Star 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

20 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 20 (%) 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 Global Star and Kaltura

The main advantage of trading using opposite Global Star and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Star 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 Global Star Acquisition 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 Global Correlations module to find global opportunities by holding instruments from different markets.