Correlation Between South Star and Kraken Energy
Can any of the company-specific risk be diversified away by investing in both South Star 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 South Star and Kraken Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and Kraken Energy Corp, you can compare the effects of market volatilities on South Star 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 South Star with a short position of Kraken Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Kraken Energy.
Diversification Opportunities for South Star and Kraken Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between South and Kraken is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery 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 South Star 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 South Star Battery 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 South Star i.e., South Star and Kraken Energy go up and down completely randomly.
Pair Corralation between South Star and Kraken Energy
Assuming the 90 days horizon South Star Battery is expected to under-perform the Kraken Energy. But the otc stock apears to be less risky and, when comparing its historical volatility, South Star Battery is 1.93 times less risky than Kraken Energy. The otc stock trades about -0.07 of its potential returns per unit of risk. The Kraken Energy Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4.09 in Kraken Energy Corp on August 29, 2024 and sell it today you would lose (1.24) from holding Kraken Energy Corp or give up 30.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. Kraken Energy Corp
Performance |
| Timeline |
| South Star Battery |
| Kraken Energy Corp |
South Star and Kraken Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Kraken Energy
The main advantage of trading using opposite South Star and Kraken Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star 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.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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