Correlation Between Adriatic Metals and Kraken Energy
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and Kraken Energy 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 Adriatic Metals and Kraken Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals PLC and Kraken Energy Corp, you can compare the effects of market volatilities on Adriatic Metals and Kraken Energy 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 Adriatic Metals with a short position of Kraken Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Kraken Energy.
Diversification Opportunities for Adriatic Metals and Kraken Energy
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adriatic and Kraken is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals PLC and Kraken Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Energy Corp and Adriatic Metals 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 Adriatic Metals PLC are associated (or correlated) with Kraken Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraken Energy Corp has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Kraken Energy go up and down completely randomly.
Pair Corralation between Adriatic Metals and Kraken Energy
Assuming the 90 days horizon Adriatic Metals PLC is expected to generate 0.42 times more return on investment than Kraken Energy. However, Adriatic Metals PLC is 2.37 times less risky than Kraken Energy. It trades about 0.03 of its potential returns per unit of risk. Kraken Energy Corp is currently generating about -0.03 per unit of risk. If you would invest 205.00 in Adriatic Metals PLC on August 30, 2024 and sell it today you would earn a total of 58.00 from holding Adriatic Metals PLC or generate 28.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals PLC vs. Kraken Energy Corp
Performance |
| Timeline |
| Adriatic Metals PLC |
| Kraken Energy Corp |
Adriatic Metals and Kraken Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Kraken Energy
The main advantage of trading using opposite Adriatic Metals and Kraken Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, Kraken Energy 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 Energy will offset losses from the drop in Kraken Energy's long position.| Adriatic Metals vs. Huntsman Exploration | Adriatic Metals vs. Aurelia Metals Limited | Adriatic Metals vs. American Helium | Adriatic Metals vs. Progressive Planet Solutions |
| Kraken Energy vs. Avarone Metals | Kraken Energy vs. Adriatic Metals PLC | Kraken Energy vs. Aurelia Metals Limited | Kraken Energy vs. Huntsman Exploration |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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