Correlation Between Legend Power and Kraken Robotics
Can any of the company-specific risk be diversified away by investing in both Legend Power 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 Legend Power and Kraken Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legend Power Systems and Kraken Robotics, you can compare the effects of market volatilities on Legend Power 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 Legend Power with a short position of Kraken Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legend Power and Kraken Robotics.
Diversification Opportunities for Legend Power and Kraken Robotics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legend and Kraken is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Legend Power Systems and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Legend Power 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 Legend Power Systems 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 Legend Power i.e., Legend Power and Kraken Robotics go up and down completely randomly.
Pair Corralation between Legend Power and Kraken Robotics
Assuming the 90 days horizon Legend Power Systems is expected to under-perform the Kraken Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Legend Power Systems is 1.06 times less risky than Kraken Robotics. The stock trades about -0.12 of its potential returns per unit of risk. The Kraken Robotics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Kraken Robotics on September 4, 2024 and sell it today you would earn a total of 35.00 from holding Kraken Robotics or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legend Power Systems vs. Kraken Robotics
Performance |
| Timeline |
| Legend Power Systems |
| Kraken Robotics |
Legend Power and Kraken Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legend Power and Kraken Robotics
The main advantage of trading using opposite Legend Power and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legend Power 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.| Legend Power vs. Kraken Robotics | Legend Power vs. Lite Access Technologies | Legend Power vs. DynaCERT | Legend Power vs. Aurora Solar Technologies |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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