Correlation Between Kaltura and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Kaltura and AerCap Holdings 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 Kaltura and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaltura and AerCap Holdings NV, you can compare the effects of market volatilities on Kaltura and AerCap Holdings 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 Kaltura with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaltura and AerCap Holdings.
Diversification Opportunities for Kaltura and AerCap Holdings
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaltura and AerCap is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Kaltura 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 Kaltura are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Kaltura i.e., Kaltura and AerCap Holdings go up and down completely randomly.
Pair Corralation between Kaltura and AerCap Holdings
Given the investment horizon of 90 days Kaltura is expected to generate 4.18 times more return on investment than AerCap Holdings. However, Kaltura is 4.18 times more volatile than AerCap Holdings NV. It trades about 0.46 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.14 per unit of risk. If you would invest 131.00 in Kaltura on August 28, 2024 and sell it today you would earn a total of 92.00 from holding Kaltura or generate 70.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaltura vs. AerCap Holdings NV
Performance |
| Timeline |
| Kaltura |
| AerCap Holdings NV |
Kaltura and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaltura and AerCap Holdings
The main advantage of trading using opposite Kaltura and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaltura position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.The idea behind Kaltura and AerCap Holdings NV 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.| AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. McGrath RentCorp | AerCap Holdings vs. Mega Matrix Corp | AerCap 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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