Correlation Between Kalray SA and Adocia

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

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

Diversification Opportunities for Kalray SA and Adocia

-0.2

Correlation Coefficient

Kalray SA  Adocia

Good diversification

The 3 months correlation between Kalray and Adocia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Adocia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adocia 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 Adocia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adocia has no effect on the direction of Kalray SA i.e., Kalray SA and Adocia go up and down completely randomly.

Pair Corralation between Kalray SA and Adocia

Assuming the 90 days trading horizon Kalray SA is expected to under-perform the Adocia. In addition to that, Kalray SA is 1.95 times more volatile than Adocia. It trades about -0.12 of its total potential returns per unit of risk. Adocia is currently generating about -0.21 per unit of volatility. If you would invest  685.00  in Adocia on October 15, 2024 and sell it today you would lose (95.00) from holding Adocia or give up 13.87% of portfolio value over 90 days.

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

Kalray SA  vs.  Adocia

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 weak basic indicators, Kalray SA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Adocia

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adocia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adocia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kalray SA and Adocia

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

The idea behind Kalray SA and Adocia 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.