Correlation Between Aurora Solar and Kraken Robotics
Can any of the company-specific risk be diversified away by investing in both Aurora Solar and Kraken Robotics 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 Aurora Solar and Kraken Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Solar Technologies and Kraken Robotics, you can compare the effects of market volatilities on Aurora Solar and Kraken Robotics 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 Aurora Solar with a short position of Kraken Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and Kraken Robotics.
Diversification Opportunities for Aurora Solar and Kraken Robotics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and Kraken is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Aurora Solar 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 Aurora Solar Technologies are associated (or correlated) with Kraken Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraken Robotics has no effect on the direction of Aurora Solar i.e., Aurora Solar and Kraken Robotics go up and down completely randomly.
Pair Corralation between Aurora Solar and Kraken Robotics
Assuming the 90 days horizon Aurora Solar is expected to generate 1.25 times less return on investment than Kraken Robotics. In addition to that, Aurora Solar is 2.12 times more volatile than Kraken Robotics. It trades about 0.06 of its total potential returns per unit of risk. Kraken Robotics is currently generating about 0.15 per unit of volatility. If you would invest 200.00 in Kraken Robotics on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Kraken Robotics or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Solar Technologies vs. Kraken Robotics
Performance |
| Timeline |
| Aurora Solar Technologies |
| Kraken Robotics |
Aurora Solar and Kraken Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Solar and Kraken Robotics
The main advantage of trading using opposite Aurora Solar and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Solar position performs unexpectedly, Kraken Robotics 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 Kraken Robotics will offset losses from the drop in Kraken Robotics' long position.| Aurora Solar vs. Solar Alliance Energy | Aurora Solar vs. Lite Access Technologies | Aurora Solar vs. Braille Energy Systems |
| Kraken Robotics vs. Braille Energy Systems | Kraken Robotics vs. Lite Access Technologies | Kraken Robotics vs. Solar Alliance Energy |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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