Correlation Between Kudelski and Carlo Gavazzi

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

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

Diversification Opportunities for Kudelski and Carlo Gavazzi

0.36

Correlation Coefficient

Kudelski  Carlo Gavazzi

Weak diversification

The 3 months correlation between Kudelski and Carlo is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kudelski and Carlo Gavazzi Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlo Gavazzi Holding and Kudelski 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 Kudelski are associated (or correlated) with Carlo Gavazzi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlo Gavazzi Holding has no effect on the direction of Kudelski i.e., Kudelski and Carlo Gavazzi go up and down completely randomly.

Pair Corralation between Kudelski and Carlo Gavazzi

Assuming the 90 days trading horizon Kudelski is expected to generate 1.11 times less return on investment than Carlo Gavazzi. In addition to that, Kudelski is 1.55 times more volatile than Carlo Gavazzi Holding. It trades about 0.25 of its total potential returns per unit of risk. Carlo Gavazzi Holding is currently generating about 0.42 per unit of volatility. If you would invest  18,550  in Carlo Gavazzi Holding on November 28, 2024 and sell it today you would earn a total of  3,650  from holding Carlo Gavazzi Holding or generate 19.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kudelski  vs.  Carlo Gavazzi Holding

Kudelski

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kudelski are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Kudelski showed solid returns over the last few months and may actually be approaching a breakup point.

Carlo Gavazzi Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlo Gavazzi Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Carlo Gavazzi may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Kudelski and Carlo Gavazzi

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

The idea behind Kudelski and Carlo Gavazzi Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.