Correlation Between Blackline and Kaltura
Can any of the company-specific risk be diversified away by investing in both Blackline 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 Blackline and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackline and Kaltura, you can compare the effects of market volatilities on Blackline 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 Blackline with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and Kaltura.
Diversification Opportunities for Blackline and Kaltura
Poor diversification
The 3 months correlation between Blackline and Kaltura is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Blackline 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 Blackline 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 Blackline i.e., Blackline and Kaltura go up and down completely randomly.
Pair Corralation between Blackline and Kaltura
Allowing for the 90-day total investment horizon Blackline is expected to generate 2.27 times less return on investment than Kaltura. But when comparing it to its historical volatility, Blackline is 2.22 times less risky than Kaltura. It trades about 0.26 of its potential returns per unit of risk. Kaltura is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 131.00 in Kaltura on August 26, 2024 and sell it today you would earn a total of 79.00 from holding Kaltura or generate 60.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackline vs. Kaltura
Performance |
| Timeline |
| Blackline |
| Kaltura |
Blackline and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackline and Kaltura
The main advantage of trading using opposite Blackline and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackline 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 Blackline 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.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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