Correlation Between Kaltura and Bridgeline Digital

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

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

Diversification Opportunities for Kaltura and Bridgeline Digital

0.41

Correlation Coefficient

Kaltura  Bridgeline Digital

Very weak diversification

The 3 months correlation between Kaltura and Bridgeline is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Bridgeline Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgeline Digital and Kaltura 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 Kaltura are associated (or correlated) with Bridgeline Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgeline Digital has no effect on the direction of Kaltura i.e., Kaltura and Bridgeline Digital go up and down completely randomly.

Pair Corralation between Kaltura and Bridgeline Digital

Given the investment horizon of 90 days Kaltura is expected to generate 1.19 times more return on investment than Bridgeline Digital. However, Kaltura is 1.19 times more volatile than Bridgeline Digital. It trades about 0.2 of its potential returns per unit of risk. Bridgeline Digital is currently generating about 0.1 per unit of risk. If you would invest  136.00  in Kaltura on September 23, 2024 and sell it today you would earn a total of  98.00  from holding Kaltura or generate 72.06% return on investment over 90 days.

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

Kaltura  vs.  Bridgeline Digital

Kaltura

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 15 (%) 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.

Bridgeline Digital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgeline Digital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Bridgeline Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaltura and Bridgeline Digital

The main advantage of trading using opposite Kaltura and Bridgeline Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaltura position performs unexpectedly, Bridgeline Digital 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 Bridgeline Digital will offset losses from the drop in Bridgeline Digital's long position.

The idea behind Kaltura and Bridgeline Digital 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.