Correlation Between Kalray SA and Sensorion

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

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

Diversification Opportunities for Kalray SA and Sensorion

0.53

Correlation Coefficient

Kalray SA  Sensorion

Very weak diversification

The 3 months correlation between Kalray and Sensorion is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Sensorion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensorion 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 Sensorion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensorion SA has no effect on the direction of Kalray SA i.e., Kalray SA and Sensorion go up and down completely randomly.

Pair Corralation between Kalray SA and Sensorion

Assuming the 90 days trading horizon Kalray SA is expected to generate 7.24 times more return on investment than Sensorion. However, Kalray SA is 7.24 times more volatile than Sensorion SA. It trades about -0.01 of its potential returns per unit of risk. Sensorion SA is currently generating about -0.14 per unit of risk. If you would invest  240.00  in Kalray SA on September 26, 2024 and sell it today you would lose (136.00) from holding Kalray SA or give up 56.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Kalray SA  vs.  Sensorion 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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Sensorion SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensorion 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 Kalray SA and Sensorion

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

The idea behind Kalray SA and Sensorion 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.