Correlation Between Kaltura and Cencora

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

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

Diversification Opportunities for Kaltura and Cencora

0.79

Correlation Coefficient

Kaltura  Cencora

Poor diversification

The 3 months correlation between Kaltura and Cencora is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora 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 Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Kaltura i.e., Kaltura and Cencora go up and down completely randomly.

Pair Corralation between Kaltura and Cencora

Given the investment horizon of 90 days Kaltura is expected to generate 3.36 times more return on investment than Cencora. However, Kaltura is 3.36 times more volatile than Cencora. It trades about 0.27 of its potential returns per unit of risk. Cencora is currently generating about -0.02 per unit of risk. If you would invest  118.00  in Kaltura on September 12, 2024 and sell it today you would earn a total of  117.00  from holding Kaltura or generate 99.15% return on investment over 90 days.

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

Kaltura  vs.  Cencora

Kaltura

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 21 (%) 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.

Cencora

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Cencora has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cencora is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kaltura and Cencora

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

The idea behind Kaltura and Cencora 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.