Correlation Between Small Cap and Kalera Public

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

By analyzing existing cross correlation between Small Cap Premium and Kalera Public Limited, you can compare the effects of market volatilities on Small Cap and Kalera Public 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 Small Cap with a short position of Kalera Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Kalera Public.

Diversification Opportunities for Small Cap and Kalera Public

0.0

Correlation Coefficient

Small Cap  Kalera Public

Pay attention - limited upside

The 3 months correlation between Small and Kalera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and Kalera Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalera Public Limited and Small Cap 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 Small Cap Premium are associated (or correlated) with Kalera Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalera Public Limited has no effect on the direction of Small Cap i.e., Small Cap and Kalera Public go up and down completely randomly.

Pair Corralation between Small Cap and Kalera Public

If you would invest  2,164  in Small Cap Premium on September 12, 2024 and sell it today you would earn a total of  292.00  from holding Small Cap Premium or generate 13.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Small Cap Premium  vs.  Kalera Public Limited

Small Cap Premium

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Premium are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Small Cap is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Kalera Public Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Small Cap and Kalera Public

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

The idea behind Small Cap Premium and Kalera Public Limited 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.

Check out your portfolio center.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.