Correlation Between Rave Restaurant and Kaltura
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant 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 Rave Restaurant and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rave Restaurant Group and Kaltura, you can compare the effects of market volatilities on Rave Restaurant 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 Rave Restaurant with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Kaltura.
Diversification Opportunities for Rave Restaurant and Kaltura
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rave and Kaltura is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Rave Restaurant 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 Rave Restaurant Group 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 Rave Restaurant i.e., Rave Restaurant and Kaltura go up and down completely randomly.
Pair Corralation between Rave Restaurant and Kaltura
Given the investment horizon of 90 days Rave Restaurant is expected to generate 10.37 times less return on investment than Kaltura. But when comparing it to its historical volatility, Rave Restaurant Group is 1.83 times less risky than Kaltura. It trades about 0.08 of its potential returns per unit of risk. Kaltura is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 131.00 in Kaltura on August 29, 2024 and sell it today you would earn a total of 86.00 from holding Kaltura or generate 65.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rave Restaurant Group vs. Kaltura
Performance |
| Timeline |
| Rave Restaurant Group |
| Kaltura |
Rave Restaurant and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and Kaltura
The main advantage of trading using opposite Rave Restaurant and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant 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.| Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |