Correlation Between Kaltura and MACYS

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

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

Diversification Opportunities for Kaltura and MACYS

-0.46

Correlation Coefficient

Kaltura  MACYS

Very good diversification

The 3 months correlation between Kaltura and MACYS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and MACYS RETAIL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACYS RETAIL HLDGS 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 MACYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACYS RETAIL HLDGS has no effect on the direction of Kaltura i.e., Kaltura and MACYS go up and down completely randomly.

Pair Corralation between Kaltura and MACYS

Given the investment horizon of 90 days Kaltura is expected to generate 3.45 times more return on investment than MACYS. However, Kaltura is 3.45 times more volatile than MACYS RETAIL HLDGS. It trades about 0.2 of its potential returns per unit of risk. MACYS RETAIL HLDGS is currently generating about 0.0 per unit of risk. If you would invest  135.00  in Kaltura on September 27, 2024 and sell it today you would earn a total of  98.00  from holding Kaltura or generate 72.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

Kaltura  vs.  MACYS RETAIL HLDGS

Kaltura

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 16 (%) 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.

MACYS RETAIL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MACYS RETAIL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MACYS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kaltura and MACYS

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

The idea behind Kaltura and MACYS RETAIL HLDGS 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.