Correlation Between Kalray SA and Neoen SA
Can any of the company-specific risk be diversified away by investing in both Kalray SA and Neoen 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 Kalray SA and Neoen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kalray SA and Neoen SA, you can compare the effects of market volatilities on Kalray SA and Neoen 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 Kalray SA with a short position of Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalray SA and Neoen SA.
Diversification Opportunities for Kalray SA and Neoen SA
Pay attention - limited upside
The 3 months correlation between Kalray and Neoen is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kalray SA and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen SA 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 Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of Kalray SA i.e., Kalray SA and Neoen SA go up and down completely randomly.
Pair Corralation between Kalray SA and Neoen SA
Assuming the 90 days trading horizon Kalray SA is expected to under-perform the Neoen SA. In addition to that, Kalray SA is 5.02 times more volatile than Neoen SA. It trades about -0.08 of its total potential returns per unit of risk. Neoen SA is currently generating about 0.08 per unit of volatility. If you would invest 2,824 in Neoen SA on September 3, 2024 and sell it today you would earn a total of 1,130 from holding Neoen SA or generate 40.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalray SA vs. Neoen SA
Performance |
| Timeline |
| Kalray SA |
| Neoen SA |
Kalray SA and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalray SA and Neoen SA
The main advantage of trading using opposite Kalray SA and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalray SA position performs unexpectedly, Neoen 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 Neoen SA will offset losses from the drop in Neoen SA's long position.The idea behind Kalray SA and Neoen 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.| Neoen SA vs. Voltalia SA | Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Worldline SA | Neoen SA vs. Rubis SCA |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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