Correlation Between Kraken Energy and Niobay Metals
Can any of the company-specific risk be diversified away by investing in both Kraken Energy and Niobay Metals 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 Niobay Metals 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 Niobay Metals, you can compare the effects of market volatilities on Kraken Energy and Niobay Metals 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 Niobay Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Energy and Niobay Metals.
Diversification Opportunities for Kraken Energy and Niobay Metals
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kraken and Niobay is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Energy Corp and Niobay Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niobay Metals 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 Niobay Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niobay Metals has no effect on the direction of Kraken Energy i.e., Kraken Energy and Niobay Metals go up and down completely randomly.
Pair Corralation between Kraken Energy and Niobay Metals
Assuming the 90 days horizon Kraken Energy is expected to generate 1.17 times less return on investment than Niobay Metals. But when comparing it to its historical volatility, Kraken Energy Corp is 1.29 times less risky than Niobay Metals. It trades about 0.07 of its potential returns per unit of risk. Niobay Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Niobay Metals on November 4, 2024 and sell it today you would lose (0.01) from holding Niobay Metals or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraken Energy Corp vs. Niobay Metals
Performance |
| Timeline |
| Kraken Energy Corp |
| Niobay Metals |
Kraken Energy and Niobay Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraken Energy and Niobay Metals
The main advantage of trading using opposite Kraken Energy and Niobay Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Energy position performs unexpectedly, Niobay Metals 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 Niobay Metals will offset losses from the drop in Niobay Metals' long position.| Kraken Energy vs. Avarone Metals | Kraken Energy vs. Adriatic Metals PLC | Kraken Energy vs. Aurelia Metals Limited | Kraken Energy vs. Huntsman Exploration |
| Niobay Metals vs. Murchison Minerals | Niobay Metals vs. Mundoro Capital | Niobay Metals vs. E79 Resources Corp | Niobay Metals vs. Norra Metals 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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