Correlation Between Herc Holdings and Kaltura
Can any of the company-specific risk be diversified away by investing in both Herc Holdings 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 Herc Holdings and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and Kaltura, you can compare the effects of market volatilities on Herc Holdings 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 Herc Holdings with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Kaltura.
Diversification Opportunities for Herc Holdings and Kaltura
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Herc and Kaltura is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Herc Holdings 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 Herc Holdings 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 Herc Holdings i.e., Herc Holdings and Kaltura go up and down completely randomly.
Pair Corralation between Herc Holdings and Kaltura
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.44 times less return on investment than Kaltura. But when comparing it to its historical volatility, Herc Holdings is 1.27 times less risky than Kaltura. It trades about 0.25 of its potential returns per unit of risk. Kaltura is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Kaltura on August 28, 2024 and sell it today you would earn a total of 88.00 from holding Kaltura or generate 65.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Herc Holdings vs. Kaltura
Performance |
| Timeline |
| Herc Holdings |
| Kaltura |
Herc Holdings and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Kaltura
The main advantage of trading using opposite Herc Holdings and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings 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.| Herc Holdings vs. PROG Holdings | Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Mega Matrix Corp | Herc Holdings vs. FTAI Aviation Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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