Correlation Between Kalray SA and Neovacs SA

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

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

Diversification Opportunities for Kalray SA and Neovacs SA

0.88

Correlation Coefficient

Kalray SA  Neovacs SA

Very poor diversification

The 3 months correlation between Kalray and Neovacs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Neovacs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neovacs SA 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 Neovacs SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neovacs SA has no effect on the direction of Kalray SA i.e., Kalray SA and Neovacs SA go up and down completely randomly.

Pair Corralation between Kalray SA and Neovacs SA

Assuming the 90 days trading horizon Kalray SA is expected to generate 1.35 times less return on investment than Neovacs SA. But when comparing it to its historical volatility, Kalray SA is 1.35 times less risky than Neovacs SA. It trades about 0.0 of its potential returns per unit of risk. Neovacs SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  600.00  in Neovacs SA on September 24, 2024 and sell it today you would lose (487.00) from holding Neovacs SA or give up 81.17% of portfolio value over 90 days.

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

Kalray SA  vs.  Neovacs SA

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.

Neovacs SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neovacs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Neovacs SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kalray SA and Neovacs SA

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

The idea behind Kalray SA and Neovacs 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.