Correlation Between Kaltura and Hooker Furniture

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

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

Diversification Opportunities for Kaltura and Hooker Furniture

0.55

Correlation Coefficient

Kaltura  Hooker Furniture

Very weak diversification

The 3 months correlation between Kaltura and Hooker is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture 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 Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Kaltura i.e., Kaltura and Hooker Furniture go up and down completely randomly.

Pair Corralation between Kaltura and Hooker Furniture

Given the investment horizon of 90 days Kaltura is expected to generate 1.31 times more return on investment than Hooker Furniture. However, Kaltura is 1.31 times more volatile than Hooker Furniture. It trades about 0.23 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.02 per unit of risk. If you would invest  128.00  in Kaltura on September 16, 2024 and sell it today you would earn a total of  97.00  from holding Kaltura or generate 75.78% return on investment over 90 days.

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

Kaltura  vs.  Hooker Furniture

Kaltura

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 18 (%) 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.

Hooker Furniture

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Hooker Furniture is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kaltura and Hooker Furniture

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

The idea behind Kaltura and Hooker Furniture 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.