Correlation Between Kaltura and Mattel
Can any of the company-specific risk be diversified away by investing in both Kaltura and Mattel 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 Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaltura and Mattel Inc, you can compare the effects of market volatilities on Kaltura and Mattel 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 Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaltura and Mattel.
Diversification Opportunities for Kaltura and Mattel
Good diversification
The 3 months correlation between Kaltura and Mattel is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc 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 Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Kaltura i.e., Kaltura and Mattel go up and down completely randomly.
Pair Corralation between Kaltura and Mattel
Given the investment horizon of 90 days Kaltura is expected to generate 1.87 times more return on investment than Mattel. However, Kaltura is 1.87 times more volatile than Mattel Inc. It trades about 0.03 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.01 per unit of risk. If you would invest 183.00 in Kaltura on August 25, 2024 and sell it today you would earn a total of 27.00 from holding Kaltura or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaltura vs. Mattel Inc
Performance |
| Timeline |
| Kaltura |
| Mattel Inc |
Kaltura and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaltura and Mattel
The main advantage of trading using opposite Kaltura and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaltura position performs unexpectedly, Mattel 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 Mattel will offset losses from the drop in Mattel's long position.The idea behind Kaltura and Mattel Inc 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.| Mattel vs. MCBC Holdings | Mattel vs. Marine Products | Mattel vs. Winnebago Industries | Mattel vs. LCI Industries |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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