Correlation Between Nacon Sa and Kalray SA
Can any of the company-specific risk be diversified away by investing in both Nacon Sa and Kalray 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 Nacon Sa and Kalray SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nacon Sa and Kalray SA, you can compare the effects of market volatilities on Nacon Sa and Kalray 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 Nacon Sa with a short position of Kalray SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nacon Sa and Kalray SA.
Diversification Opportunities for Nacon Sa and Kalray SA
Very poor diversification
The 3 months correlation between Nacon and Kalray is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nacon Sa and Kalray SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalray SA and Nacon 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 Nacon Sa are associated (or correlated) with Kalray SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalray SA has no effect on the direction of Nacon Sa i.e., Nacon Sa and Kalray SA go up and down completely randomly.
Pair Corralation between Nacon Sa and Kalray SA
Assuming the 90 days trading horizon Nacon Sa is expected to under-perform the Kalray SA. But the stock apears to be less risky and, when comparing its historical volatility, Nacon Sa is 2.36 times less risky than Kalray SA. The stock trades about -0.1 of its potential returns per unit of risk. The Kalray SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,828 in Kalray SA on August 31, 2024 and sell it today you would lose (1,612) from holding Kalray SA or give up 88.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nacon Sa vs. Kalray SA
Performance |
| Timeline |
| Nacon Sa |
| Kalray SA |
Nacon Sa and Kalray SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nacon Sa and Kalray SA
The main advantage of trading using opposite Nacon Sa and Kalray SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nacon Sa position performs unexpectedly, Kalray 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 Kalray SA will offset losses from the drop in Kalray SA's long position.| Nacon Sa vs. BigBen Interactive | Nacon Sa vs. Neoen SA | Nacon Sa vs. Solutions 30 SE | Nacon Sa vs. Voltalia SA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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