Correlation Between Kalray SA and Carmat

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

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

Diversification Opportunities for Kalray SA and Carmat

0.51

Correlation Coefficient

Kalray SA  Carmat

Very weak diversification

The 3 months correlation between Kalray and Carmat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Carmat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmat and Kalray SA 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 Kalray SA are associated (or correlated) with Carmat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmat has no effect on the direction of Kalray SA i.e., Kalray SA and Carmat go up and down completely randomly.

Pair Corralation between Kalray SA and Carmat

Assuming the 90 days trading horizon Kalray SA is expected to generate 3.41 times more return on investment than Carmat. However, Kalray SA is 3.41 times more volatile than Carmat. It trades about 0.0 of its potential returns per unit of risk. Carmat is currently generating about -0.13 per unit of risk. If you would invest  215.00  in Kalray SA on September 24, 2024 and sell it today you would lose (113.00) from holding Kalray SA or give up 52.56% of portfolio value over 90 days.

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

Kalray SA  vs.  Carmat

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 relatively invariable basic indicators, Kalray SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Carmat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carmat 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 Kalray SA and Carmat

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

The idea behind Kalray SA and Carmat 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.