Correlation Between Kraken Robotics and Luna Innovations
Can any of the company-specific risk be diversified away by investing in both Kraken Robotics and Luna Innovations 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 Kraken Robotics and Luna Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraken Robotics and Luna Innovations Incorporated, you can compare the effects of market volatilities on Kraken Robotics and Luna Innovations 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 Kraken Robotics with a short position of Luna Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Robotics and Luna Innovations.
Diversification Opportunities for Kraken Robotics and Luna Innovations
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kraken and Luna is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Robotics and Luna Innovations Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luna Innovations and Kraken Robotics 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 Kraken Robotics are associated (or correlated) with Luna Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luna Innovations has no effect on the direction of Kraken Robotics i.e., Kraken Robotics and Luna Innovations go up and down completely randomly.
Pair Corralation between Kraken Robotics and Luna Innovations
Assuming the 90 days horizon Kraken Robotics is expected to generate 0.75 times more return on investment than Luna Innovations. However, Kraken Robotics is 1.33 times less risky than Luna Innovations. It trades about 0.12 of its potential returns per unit of risk. Luna Innovations Incorporated is currently generating about -0.06 per unit of risk. If you would invest 37.00 in Kraken Robotics on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Kraken Robotics or generate 291.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraken Robotics vs. Luna Innovations Incorporated
Performance |
| Timeline |
| Kraken Robotics |
| Luna Innovations |
Kraken Robotics and Luna Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraken Robotics and Luna Innovations
The main advantage of trading using opposite Kraken Robotics and Luna Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Robotics position performs unexpectedly, Luna Innovations 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 Luna Innovations will offset losses from the drop in Luna Innovations' long position.| Kraken Robotics vs. SaverOne 2014 Ltd | Kraken Robotics vs. Focus Universal | Kraken Robotics vs. Nanalysis Scientific Corp | Kraken Robotics vs. Genasys |
| Luna Innovations vs. ESCO Technologies | Luna Innovations vs. Know Labs | Luna Innovations vs. Focus Universal | Luna Innovations vs. Sono Tek Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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