Correlation Between Chemours and Kaltura

Can any of the company-specific risk be diversified away by investing in both Chemours 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 Chemours and Kaltura into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemours Co and Kaltura, you can compare the effects of market volatilities on Chemours 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 Chemours with a short position of Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Kaltura.

Diversification Opportunities for Chemours and Kaltura

0.63

Correlation Coefficient

Chemours  Kaltura

Poor diversification

The 3 months correlation between Chemours and Kaltura is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Chemours 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 Chemours Co 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 Chemours i.e., Chemours and Kaltura go up and down completely randomly.

Pair Corralation between Chemours and Kaltura

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.63 times more return on investment than Kaltura. However, Chemours is 1.63 times more volatile than Kaltura. It trades about -0.02 of its potential returns per unit of risk. Kaltura is currently generating about -0.31 per unit of risk. If you would invest  2,729  in Chemours Co on January 20, 2024 and sell it today you would lose (81.00) from holding Chemours Co or give up 2.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Chemours Co  vs.  Kaltura

Chemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Kaltura

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaltura has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Chemours and Kaltura

The main advantage of trading using opposite Chemours and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours 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 Chemours Co 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.