Correlation Between Compagnie Des and Kalray SA

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

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

Diversification Opportunities for Compagnie Des and Kalray SA

-0.63

Correlation Coefficient

Compagnie Des  Kalray SA

Excellent diversification

The 3 months correlation between Compagnie and Kalray is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie des Alpes and Kalray SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalray SA and Compagnie Des 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 Compagnie des Alpes 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 Compagnie Des i.e., Compagnie Des and Kalray SA go up and down completely randomly.

Pair Corralation between Compagnie Des and Kalray SA

Assuming the 90 days trading horizon Compagnie des Alpes is expected to generate 0.07 times more return on investment than Kalray SA. However, Compagnie des Alpes is 15.28 times less risky than Kalray SA. It trades about 0.06 of its potential returns per unit of risk. Kalray SA is currently generating about 0.0 per unit of risk. If you would invest  1,396  in Compagnie des Alpes on September 24, 2024 and sell it today you would earn a total of  62.00  from holding Compagnie des Alpes or generate 4.44% return on investment over 90 days.

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

Compagnie des Alpes  vs.  Kalray SA

Compagnie des Alpes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie des Alpes are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Compagnie Des is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Compagnie Des and Kalray SA

The main advantage of trading using opposite Compagnie Des and Kalray SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Des 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 Compagnie des Alpes 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.