Correlation Between Kaltura and Yuexiu Transport

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

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

Diversification Opportunities for Kaltura and Yuexiu Transport

0.93

Correlation Coefficient

Kaltura  Yuexiu Transport

Almost no diversification

The 3 months correlation between Kaltura and Yuexiu is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Kaltura i.e., Kaltura and Yuexiu Transport go up and down completely randomly.

Pair Corralation between Kaltura and Yuexiu Transport

Given the investment horizon of 90 days Kaltura is expected to generate 1.43 times more return on investment than Yuexiu Transport. However, Kaltura is 1.43 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.2 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.13 per unit of risk. If you would invest  136.00  in Kaltura on September 21, 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	Very Strong
Accuracy	98.44%
Values	Daily Returns

Kaltura  vs.  Yuexiu Transport Infrastructur

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 unsteady basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Yuexiu Transport Inf

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yuexiu Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaltura and Yuexiu Transport

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

The idea behind Kaltura and Yuexiu Transport Infrastructure 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.