Correlation Between Kraken Robotics and Focus Universal

Can any of the company-specific risk be diversified away by investing in both Kraken Robotics and Focus Universal 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 Robotics and Focus Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kraken Robotics and Focus Universal, you can compare the effects of market volatilities on Kraken Robotics and Focus Universal 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 Robotics with a short position of Focus Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraken Robotics and Focus Universal.

Diversification Opportunities for Kraken Robotics and Focus Universal

-0.42

Correlation Coefficient

Kraken Robotics  Focus Universal

Very good diversification

The 3 months correlation between Kraken and Focus is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kraken Robotics and Focus Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Universal and Kraken Robotics 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 Robotics are associated (or correlated) with Focus Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Universal has no effect on the direction of Kraken Robotics i.e., Kraken Robotics and Focus Universal go up and down completely randomly.

Pair Corralation between Kraken Robotics and Focus Universal

Assuming the 90 days horizon Kraken Robotics is expected to generate 0.55 times more return on investment than Focus Universal. However, Kraken Robotics is 1.81 times less risky than Focus Universal. It trades about 0.18 of its potential returns per unit of risk. Focus Universal is currently generating about 0.02 per unit of risk. If you would invest  108.00  in Kraken Robotics on September 3, 2024 and sell it today you would earn a total of  58.00  from holding Kraken Robotics or generate 53.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kraken Robotics  vs.  Focus Universal

Kraken Robotics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kraken Robotics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Kraken Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Focus Universal

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Universal are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Focus Universal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kraken Robotics and Focus Universal

The main advantage of trading using opposite Kraken Robotics and Focus Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraken Robotics position performs unexpectedly, Focus Universal 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 Focus Universal will offset losses from the drop in Focus Universal's long position.

The idea behind Kraken Robotics and Focus Universal 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.

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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.