Correlation Between Kalray SA and Spineway

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

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

Diversification Opportunities for Kalray SA and Spineway

0.79

Correlation Coefficient

Kalray SA  Spineway

Poor diversification

The 3 months correlation between Kalray and Spineway is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Spineway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spineway 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 Spineway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spineway has no effect on the direction of Kalray SA i.e., Kalray SA and Spineway go up and down completely randomly.

Pair Corralation between Kalray SA and Spineway

Assuming the 90 days trading horizon Kalray SA is expected to generate 1.76 times more return on investment than Spineway. However, Kalray SA is 1.76 times more volatile than Spineway. It trades about 0.07 of its potential returns per unit of risk. Spineway is currently generating about 0.07 per unit of risk. If you would invest  115.00  in Kalray SA on September 24, 2024 and sell it today you would lose (13.00) from holding Kalray SA or give up 11.3% of portfolio value over 90 days.

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

Kalray SA  vs.  Spineway

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.

Spineway

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spineway 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 Spineway

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

The idea behind Kalray SA and Spineway 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..