Correlation Between SCE Trust and Kaltura
Can any of the company-specific risk be diversified away by investing in both SCE Trust 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 SCE Trust and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCE Trust IV and Kaltura, you can compare the effects of market volatilities on SCE Trust 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 SCE Trust with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCE Trust and Kaltura.
Diversification Opportunities for SCE Trust and Kaltura
Very weak diversification
The 3 months correlation between SCE and Kaltura is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SCE Trust IV and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and SCE Trust 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 SCE Trust IV 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 SCE Trust i.e., SCE Trust and Kaltura go up and down completely randomly.
Pair Corralation between SCE Trust and Kaltura
Assuming the 90 days trading horizon SCE Trust is expected to generate 1.49 times less return on investment than Kaltura. But when comparing it to its historical volatility, SCE Trust IV is 4.62 times less risky than Kaltura. It trades about 0.1 of its potential returns per unit of risk. Kaltura is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Kaltura on August 31, 2024 and sell it today you would earn a total of 42.00 from holding Kaltura or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCE Trust IV vs. Kaltura
Performance |
| Timeline |
| SCE Trust IV |
| Kaltura |
SCE Trust and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCE Trust and Kaltura
The main advantage of trading using opposite SCE Trust and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCE Trust 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.| SCE Trust vs. Dominion Energy | SCE Trust vs. Consolidated Edison | SCE Trust vs. Eversource Energy | SCE Trust vs. FirstEnergy |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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