Correlation Between Kaltura and AMERICAN

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

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

Diversification Opportunities for Kaltura and AMERICAN

-0.74

Correlation Coefficient

Kaltura  AMERICAN

Pay attention - limited upside

The 3 months correlation between Kaltura and AMERICAN is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and AMERICAN EXPRESS CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS has no effect on the direction of Kaltura i.e., Kaltura and AMERICAN go up and down completely randomly.

Pair Corralation between Kaltura and AMERICAN

Given the investment horizon of 90 days Kaltura is expected to generate 12.39 times more return on investment than AMERICAN. However, Kaltura is 12.39 times more volatile than AMERICAN EXPRESS CR. It trades about 0.29 of its potential returns per unit of risk. AMERICAN EXPRESS CR is currently generating about -0.03 per unit of risk. If you would invest  106.00  in Kaltura on September 5, 2024 and sell it today you would earn a total of  121.00  from holding Kaltura or generate 114.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Kaltura  vs.  AMERICAN EXPRESS CR

Kaltura

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 23 (%) 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.

AMERICAN EXPRESS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMERICAN EXPRESS CR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, AMERICAN is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kaltura and AMERICAN

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

The idea behind Kaltura and AMERICAN EXPRESS CR 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.