Correlation Between LGI Homes and Kaltura
Can any of the company-specific risk be diversified away by investing in both LGI Homes 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 LGI Homes and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI Homes and Kaltura, you can compare the effects of market volatilities on LGI Homes 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 LGI Homes with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and Kaltura.
Diversification Opportunities for LGI Homes and Kaltura
Very good diversification
The 3 months correlation between LGI and Kaltura is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and LGI Homes 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 LGI Homes 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 LGI Homes i.e., LGI Homes and Kaltura go up and down completely randomly.
Pair Corralation between LGI Homes and Kaltura
Given the investment horizon of 90 days LGI Homes is expected to generate 8.44 times less return on investment than Kaltura. But when comparing it to its historical volatility, LGI Homes is 2.3 times less risky than Kaltura. It trades about 0.13 of its potential returns per unit of risk. Kaltura is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 131.00 in Kaltura on August 27, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LGI Homes vs. Kaltura
Performance |
| Timeline |
| LGI Homes |
| Kaltura |
LGI Homes and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and Kaltura
The main advantage of trading using opposite LGI Homes and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes 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.| LGI Homes vs. Arhaus Inc | LGI Homes vs. Floor Decor Holdings | LGI Homes vs. Kingfisher plc | LGI Homes vs. Haverty Furniture Companies |
| Kaltura vs. Evertec | Kaltura vs. Consensus Cloud Solutions | Kaltura vs. Global Blue Group | Kaltura vs. Lesaka Technologies |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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