Correlation Between Kraken Energy and Boss Resources
Can any of the company-specific risk be diversified away by investing in both Kraken Energy and Boss Resources 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 Energy and Boss Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraken Energy Corp and Boss Resources, you can compare the effects of market volatilities on Kraken Energy and Boss Resources 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 Energy with a short position of Boss Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Energy and Boss Resources.
Diversification Opportunities for Kraken Energy and Boss Resources
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kraken and Boss is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Energy Corp and Boss Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Resources and Kraken Energy 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 Energy Corp are associated (or correlated) with Boss Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Resources has no effect on the direction of Kraken Energy i.e., Kraken Energy and Boss Resources go up and down completely randomly.
Pair Corralation between Kraken Energy and Boss Resources
Assuming the 90 days horizon Kraken Energy Corp is expected to under-perform the Boss Resources. In addition to that, Kraken Energy is 2.08 times more volatile than Boss Resources. It trades about -0.03 of its total potential returns per unit of risk. Boss Resources is currently generating about 0.03 per unit of volatility. If you would invest 157.00 in Boss Resources on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Boss Resources or generate 26.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraken Energy Corp vs. Boss Resources
Performance |
| Timeline |
| Kraken Energy Corp |
| Boss Resources |
Kraken Energy and Boss Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraken Energy and Boss Resources
The main advantage of trading using opposite Kraken Energy and Boss Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Energy position performs unexpectedly, Boss Resources 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 Boss Resources will offset losses from the drop in Boss Resources' long position.| Kraken Energy vs. Norra Metals Corp | Kraken Energy vs. Amarc Resources | Kraken Energy vs. ZincX Resources Corp | Kraken Energy vs. Nuinsco Resources Limited |
| Boss Resources vs. Norra Metals Corp | Boss Resources vs. Amarc Resources | Boss Resources vs. ZincX Resources Corp | Boss Resources vs. Nuinsco Resources Limited |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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