Correlation Between Duolingo and Kaltura

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

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

Diversification Opportunities for Duolingo and Kaltura

-0.44

Correlation Coefficient

Duolingo  Kaltura

Very good diversification

The 3 months correlation between Duolingo and Kaltura is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Duolingo and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura and Duolingo 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 Duolingo 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 Duolingo i.e., Duolingo and Kaltura go up and down completely randomly.

Pair Corralation between Duolingo and Kaltura

Given the investment horizon of 90 days Duolingo is expected to under-perform the Kaltura. In addition to that, Duolingo is 2.11 times more volatile than Kaltura. It trades about -0.04 of its total potential returns per unit of risk. Kaltura is currently generating about 0.01 per unit of volatility. If you would invest  120.00  in Kaltura on February 14, 2024 and sell it today you would earn a total of  0.00  from holding Kaltura or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Duolingo  vs.  Kaltura

Duolingo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duolingo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Duolingo is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Duolingo and Kaltura

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

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.