Correlation Between Kaman and Thales SA

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

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

Diversification Opportunities for Kaman and Thales SA

-0.76

Correlation Coefficient

Kaman  Thales SA

Pay attention - limited upside

The 3 months correlation between Kaman and Thales is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kaman and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA and Kaman 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 Kaman are associated (or correlated) with Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Kaman i.e., Kaman and Thales SA go up and down completely randomly.

Pair Corralation between Kaman and Thales SA

If you would invest  2,402  in Kaman on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Kaman or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.79%
Values	Daily Returns

Kaman  vs.  Thales SA

Kaman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Kaman is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Thales SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thales SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kaman and Thales SA

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

The idea behind Kaman and Thales 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.