Correlation Between Waldencast Acquisition and Kaltura

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

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

Diversification Opportunities for Waldencast Acquisition and Kaltura

-0.33

Correlation Coefficient

Waldencast Acquisition  Kaltura

Very good diversification

The 3 months correlation between Waldencast and Kaltura is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Waldencast Acquisition 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 Waldencast Acquisition Corp 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 Waldencast Acquisition i.e., Waldencast Acquisition and Kaltura go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and Kaltura

Given the investment horizon of 90 days Waldencast Acquisition is expected to generate 4.25 times less return on investment than Kaltura. In addition to that, Waldencast Acquisition is 1.01 times more volatile than Kaltura. It trades about 0.06 of its total potential returns per unit of risk. Kaltura is currently generating about 0.27 per unit of volatility. If you would invest  112.00  in Kaltura on September 2, 2024 and sell it today you would earn a total of  110.00  from holding Kaltura or generate 98.21% return on investment over 90 days.

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

Waldencast Acquisition Corp  vs.  Kaltura

Waldencast Acquisition

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Waldencast Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Waldencast Acquisition exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kaltura

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 21 (%) 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 Waldencast Acquisition and Kaltura

The main advantage of trading using opposite Waldencast Acquisition and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waldencast Acquisition 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 Waldencast Acquisition Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.