Correlation Between Adocia and Kalray SA

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

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

Diversification Opportunities for Adocia and Kalray SA

-0.54

Correlation Coefficient

Adocia  Kalray SA

Excellent diversification

The 3 months correlation between Adocia and Kalray is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Adocia and Kalray SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalray SA and Adocia 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 Adocia are associated (or correlated) with Kalray SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalray SA has no effect on the direction of Adocia i.e., Adocia and Kalray SA go up and down completely randomly.

Pair Corralation between Adocia and Kalray SA

Assuming the 90 days trading horizon Adocia is expected to generate 0.7 times more return on investment than Kalray SA. However, Adocia is 1.42 times less risky than Kalray SA. It trades about 0.04 of its potential returns per unit of risk. Kalray SA is currently generating about -0.07 per unit of risk. If you would invest  434.00  in Adocia on September 30, 2024 and sell it today you would earn a total of  147.00  from holding Adocia or generate 33.87% return on investment over 90 days.

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

Adocia  vs.  Kalray SA

Adocia

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Adocia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adocia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kalray SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kalray SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Adocia and Kalray SA

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

The idea behind Adocia and Kalray SA 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.