Correlation Between Kraken Energy and Nuinsco Resources
Can any of the company-specific risk be diversified away by investing in both Kraken Energy and Nuinsco 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 Nuinsco 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 Nuinsco Resources Limited, you can compare the effects of market volatilities on Kraken Energy and Nuinsco 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 Nuinsco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Energy and Nuinsco Resources.
Diversification Opportunities for Kraken Energy and Nuinsco Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kraken and Nuinsco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Energy Corp and Nuinsco Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuinsco 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 Nuinsco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuinsco Resources has no effect on the direction of Kraken Energy i.e., Kraken Energy and Nuinsco Resources go up and down completely randomly.
Pair Corralation between Kraken Energy and Nuinsco Resources
Assuming the 90 days horizon Kraken Energy Corp is expected to generate 0.33 times more return on investment than Nuinsco Resources. However, Kraken Energy Corp is 3.05 times less risky than Nuinsco Resources. It trades about -0.13 of its potential returns per unit of risk. Nuinsco Resources Limited is currently generating about -0.06 per unit of risk. If you would invest 3.46 in Kraken Energy Corp on September 1, 2024 and sell it today you would lose (0.81) from holding Kraken Energy Corp or give up 23.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kraken Energy Corp vs. Nuinsco Resources Limited
Performance |
| Timeline |
| Kraken Energy Corp |
| Nuinsco Resources |
Kraken Energy and Nuinsco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraken Energy and Nuinsco Resources
The main advantage of trading using opposite Kraken Energy and Nuinsco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Energy position performs unexpectedly, Nuinsco 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 Nuinsco Resources will offset losses from the drop in Nuinsco Resources' long position.| Kraken Energy vs. Avarone Metals | Kraken Energy vs. Adriatic Metals PLC | Kraken Energy vs. Aurelia Metals Limited | Kraken Energy vs. Huntsman Exploration |
| Nuinsco Resources vs. Newport Gold | Nuinsco Resources vs. Monarca Minerals | Nuinsco Resources vs. First American Silver | Nuinsco Resources vs. Tamino Minerals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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