Correlation Between Kalray SA and Quantum Genomics

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

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

Diversification Opportunities for Kalray SA and Quantum Genomics

-0.43

Correlation Coefficient

Kalray SA  Quantum Genomics

Very good diversification

The 3 months correlation between Kalray and Quantum is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Quantum Genomics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Genomics 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 Quantum Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Genomics has no effect on the direction of Kalray SA i.e., Kalray SA and Quantum Genomics go up and down completely randomly.

Pair Corralation between Kalray SA and Quantum Genomics

Assuming the 90 days trading horizon Kalray SA is expected to under-perform the Quantum Genomics. But the stock apears to be less risky and, when comparing its historical volatility, Kalray SA is 1.48 times less risky than Quantum Genomics. The stock trades about -0.01 of its potential returns per unit of risk. The Quantum Genomics SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2.62  in Quantum Genomics SA on September 26, 2024 and sell it today you would earn a total of  4.59  from holding Quantum Genomics SA or generate 175.19% return on investment over 90 days.

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

Kalray SA  vs.  Quantum Genomics 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.

Quantum Genomics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Genomics SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Quantum Genomics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kalray SA and Quantum Genomics

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

The idea behind Kalray SA and Quantum Genomics 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.

Check out your portfolio center.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.