Correlation Between SmartStop Self and Kaltura

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

By analyzing existing cross correlation between SmartStop Self Storage and Kaltura, you can compare the effects of market volatilities on SmartStop Self and Kaltura 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 SmartStop Self with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartStop Self and Kaltura.

Diversification Opportunities for SmartStop Self and Kaltura

0.23

Correlation Coefficient

SmartStop Self  Kaltura

Modest diversification

The 3 months correlation between SmartStop and Kaltura is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and SmartStop Self 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 SmartStop Self Storage are associated (or correlated) with Kaltura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaltura has no effect on the direction of SmartStop Self i.e., SmartStop Self and Kaltura go up and down completely randomly.

Pair Corralation between SmartStop Self and Kaltura

Assuming the 90 days horizon SmartStop Self is expected to generate 2.36 times less return on investment than Kaltura. In addition to that, SmartStop Self is 1.1 times more volatile than Kaltura. It trades about 0.02 of its total potential returns per unit of risk. Kaltura is currently generating about 0.04 per unit of volatility. If you would invest  178.00  in Kaltura on September 14, 2024 and sell it today you would earn a total of  46.00  from holding Kaltura or generate 25.84% return on investment over 90 days.

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

SmartStop Self Storage  vs.  Kaltura

SmartStop Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartStop Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SmartStop Self is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with SmartStop Self and Kaltura

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

The idea behind SmartStop Self Storage and Kaltura 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.