Correlation Between Champion Bear and Kraken Energy
Can any of the company-specific risk be diversified away by investing in both Champion Bear 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 Champion Bear and Kraken Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Bear Resources and Kraken Energy Corp, you can compare the effects of market volatilities on Champion Bear 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 Champion Bear with a short position of Kraken Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Kraken Energy.
Diversification Opportunities for Champion Bear and Kraken Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Kraken is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources 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 Champion Bear 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 Champion Bear Resources 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 Champion Bear i.e., Champion Bear and Kraken Energy go up and down completely randomly.
Pair Corralation between Champion Bear and Kraken Energy
Assuming the 90 days horizon Champion Bear Resources is expected to under-perform the Kraken Energy. In addition to that, Champion Bear is 1.0 times more volatile than Kraken Energy Corp. It trades about -0.22 of its total potential returns per unit of risk. Kraken Energy Corp is currently generating about -0.15 per unit of volatility. If you would invest 3.55 in Kraken Energy Corp on September 4, 2024 and sell it today you would lose (0.91) from holding Kraken Energy Corp or give up 25.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Champion Bear Resources vs. Kraken Energy Corp
Performance |
| Timeline |
| Champion Bear Resources |
| Kraken Energy Corp |
Champion Bear and Kraken Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Kraken Energy
The main advantage of trading using opposite Champion Bear and Kraken Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear 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.| Champion Bear vs. Qubec Nickel Corp | Champion Bear vs. IGO Limited | Champion Bear vs. Avarone Metals | Champion Bear vs. Adriatic Metals PLC |
| Kraken Energy vs. Qubec Nickel Corp | Kraken Energy vs. IGO Limited | Kraken Energy vs. Avarone Metals | Kraken Energy vs. Adriatic Metals PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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