Correlation Between Kalray SA and Valbiotis SAS

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

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

Diversification Opportunities for Kalray SA and Valbiotis SAS

-0.01

Correlation Coefficient

Kalray SA  Valbiotis SAS

Good diversification

The 3 months correlation between Kalray and Valbiotis is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Valbiotis SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valbiotis SAS 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 Valbiotis SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valbiotis SAS has no effect on the direction of Kalray SA i.e., Kalray SA and Valbiotis SAS go up and down completely randomly.

Pair Corralation between Kalray SA and Valbiotis SAS

Assuming the 90 days trading horizon Kalray SA is expected to generate 5.22 times more return on investment than Valbiotis SAS. However, Kalray SA is 5.22 times more volatile than Valbiotis SAS. It trades about 0.07 of its potential returns per unit of risk. Valbiotis SAS is currently generating about 0.13 per unit of risk. If you would invest  115.00  in Kalray SA on September 26, 2024 and sell it today you would lose (11.00) from holding Kalray SA or give up 9.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Kalray SA  vs.  Valbiotis SAS

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.

Valbiotis SAS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Valbiotis SAS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Valbiotis SAS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kalray SA and Valbiotis SAS

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

The idea behind Kalray SA and Valbiotis SAS 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.