Correlation Between Trimble and Kraken Robotics
Can any of the company-specific risk be diversified away by investing in both Trimble 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 Trimble and Kraken Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimble and Kraken Robotics, you can compare the effects of market volatilities on Trimble 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 Trimble with a short position of Kraken Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimble and Kraken Robotics.
Diversification Opportunities for Trimble and Kraken Robotics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trimble and Kraken is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Trimble and Kraken Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraken Robotics and Trimble 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 Trimble 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 Trimble i.e., Trimble and Kraken Robotics go up and down completely randomly.
Pair Corralation between Trimble and Kraken Robotics
Given the investment horizon of 90 days Trimble is expected to generate 4.0 times less return on investment than Kraken Robotics. But when comparing it to its historical volatility, Trimble is 1.9 times less risky than Kraken Robotics. It trades about 0.06 of its potential returns per unit of risk. Kraken Robotics is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trimble vs. Kraken Robotics
Performance |
| Timeline |
| Trimble |
| Kraken Robotics |
Trimble and Kraken Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trimble and Kraken Robotics
The main advantage of trading using opposite Trimble and Kraken Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimble 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.The idea behind Trimble and Kraken Robotics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kraken Robotics vs. SaverOne 2014 Ltd | Kraken Robotics vs. Focus Universal | Kraken Robotics vs. Nanalysis Scientific Corp | Kraken Robotics vs. Genasys |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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