Correlation Between Zhihu and Kaltura
Can any of the company-specific risk be diversified away by investing in both Zhihu 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 Zhihu and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhihu Inc ADR and Kaltura, you can compare the effects of market volatilities on Zhihu 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 Zhihu with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Kaltura.
Diversification Opportunities for Zhihu and Kaltura
Good diversification
The 3 months correlation between Zhihu and Kaltura is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Zhihu 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 Zhihu Inc ADR 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 Zhihu i.e., Zhihu and Kaltura go up and down completely randomly.
Pair Corralation between Zhihu and Kaltura
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Kaltura. In addition to that, Zhihu is 1.18 times more volatile than Kaltura. It trades about -0.01 of its total potential returns per unit of risk. Kaltura is currently generating about 0.03 per unit of volatility. If you would invest 186.00 in Kaltura on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Kaltura or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Kaltura
Performance |
| Timeline |
| Zhihu Inc ADR |
| Kaltura |
Zhihu and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Kaltura
The main advantage of trading using opposite Zhihu and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu 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.The idea behind Zhihu Inc ADR and Kaltura 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.| 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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