Correlation Between Kaltura and Evertec

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

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

Diversification Opportunities for Kaltura and Evertec

0.8

Correlation Coefficient

Kaltura  Evertec

Very poor diversification

The 3 months correlation between Kaltura and Evertec is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec and Kaltura 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 Kaltura are associated (or correlated) with Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of Kaltura i.e., Kaltura and Evertec go up and down completely randomly.

Pair Corralation between Kaltura and Evertec

Given the investment horizon of 90 days Kaltura is expected to under-perform the Evertec. In addition to that, Kaltura is 1.72 times more volatile than Evertec. It trades about -0.17 of its total potential returns per unit of risk. Evertec is currently generating about -0.12 per unit of volatility. If you would invest  3,757  in Evertec on March 8, 2024 and sell it today you would lose (407.00) from holding Evertec or give up 10.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Kaltura  vs.  Evertec

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

Evertec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evertec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Kaltura and Evertec

The main advantage of trading using opposite Kaltura and Evertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaltura position performs unexpectedly, Evertec 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 Evertec will offset losses from the drop in Evertec's long position.

The idea behind Kaltura and Evertec 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.