Correlation Between Kalray SA and Wallix Group

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

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

Diversification Opportunities for Kalray SA and Wallix Group

0.17

Correlation Coefficient

Kalray SA  Wallix Group

Average diversification

The 3 months correlation between Kalray and Wallix is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Wallix Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallix Group 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 Wallix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallix Group SA has no effect on the direction of Kalray SA i.e., Kalray SA and Wallix Group go up and down completely randomly.

Pair Corralation between Kalray SA and Wallix Group

Assuming the 90 days trading horizon Kalray SA is expected to generate 8.29 times more return on investment than Wallix Group. However, Kalray SA is 8.29 times more volatile than Wallix Group SA. It trades about 0.03 of its potential returns per unit of risk. Wallix Group SA is currently generating about 0.06 per unit of risk. If you would invest  115.00  in Kalray SA on October 23, 2024 and sell it today you would lose (32.00) from holding Kalray SA or give up 27.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Kalray SA  vs.  Wallix Group SA

Kalray SA

Risk-Adjusted Performance

2 of 100

Weak

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

Wallix Group SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wallix Group SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Wallix Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kalray SA and Wallix Group

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

The idea behind Kalray SA and Wallix Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.