Correlation Between Kering SA and PULSION Medical

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

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

Diversification Opportunities for Kering SA and PULSION Medical

-0.42

Correlation Coefficient

Kering SA  PULSION Medical

Very good diversification

The 3 months correlation between Kering and PULSION is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and PULSION Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PULSION Medical Systems and Kering 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 Kering SA are associated (or correlated) with PULSION Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PULSION Medical Systems has no effect on the direction of Kering SA i.e., Kering SA and PULSION Medical go up and down completely randomly.

Pair Corralation between Kering SA and PULSION Medical

Assuming the 90 days horizon Kering SA is expected to under-perform the PULSION Medical. In addition to that, Kering SA is 3.69 times more volatile than PULSION Medical Systems. It trades about -0.2 of its total potential returns per unit of risk. PULSION Medical Systems is currently generating about -0.14 per unit of volatility. If you would invest  1,620  in PULSION Medical Systems on October 10, 2024 and sell it today you would lose (20.00) from holding PULSION Medical Systems or give up 1.23% of portfolio value over 90 days.

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

Kering SA  vs.  PULSION Medical Systems

Kering SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kering SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kering SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

PULSION Medical Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PULSION Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PULSION Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kering SA and PULSION Medical

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

The idea behind Kering SA and PULSION Medical Systems 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.